Human capital
Contents
Definition
Human capital is The part of organization's intangible assets which is embedded in people working in the organization and is based on people's knowledge, skills and competences
Summary
One paragraph.
Description
Human asset is a part of an organization's intangible assets (see Fig 1). It includes the knowledge, skills, competencies and qualifications of the people in the organization. Also teams, networks and communities of practice are a part of human assets. One could say that human asset is the part of organization's assets that walks out every day and is not as straightforward to manage as tangible assets.
Human asset refers to economical view of human resources. Human assets are developed via investments like training with the expectation that this investment enhances potential income earning of the organization.
Management of human assets
Human assets are managed as a part of organisation's asset management and there are several human asset related business processes available in all organisations.
When considering development of their human assets, an organisation may choose to import new human resources via recruitment, develop the exiting human resources via individual learning or develop it's organisational knowledge e.g. via communities.
The uncertainty related to human assets derives from the uncertainty related to human assets embedded in individual people who could leave the organisation on a short notice. One approach to cope with this uncertainty is to use knowledge management tools and processes to ensure that knowledge of individuals is being diffused and documented.
The most typical processes available in organisations include
- Human resource development
- Training
- Education
- Recruitment
- Knowledge management
- OPEX
- Communities of practice
