Capital is defined as resource or the input into a business. Human capital can therefore be defined as an input in employees, the ability to perform a task with the aim of producing economic value. Human skills are needed to implement a business idea. Hence human capital importance is non -ignorable in a business. The ability to perform a task is gained by an individual through learning and experience.
The company can organize training for the employees and in this way improve on the skills such as presentation, telephone manner, time management and self evaluation towards set goals, and in this way have them get updated on new technologies and thus keep them on top of the game. The company can also opt to hire competent personnel.
Use of tests, also helps a company monitor the performance of its employees and in this way it is able to know whether they need to advised on certain matters. Use of incentives also helps the employees to give their best; this involves offering prizes to the best performing employee. Boosting their morale by letting them know that they are important assets in the company is also important.
Human capital can also be defined as the workforce. The processes of workforce formation can be defined as the transformation of raw man power resource into productive resource. This leads to improvement in the quantity of production. It also leads to customer loyalty, as the customers get to receive better services.
The transformation requires an organization to input education, health, moral values and also enhanced benefits. This workforce is classified as intangible capital. The human capital importance makes the individual undergoing the transformation build a feeling of respect, personal growth and hence leads to better output. Whether in a small or a very large business investing in human capital is very important.
Human capital officers also known as the human resource officers are important people in the business, as they are the link between employees and the organization. These officers are therefore the most important people in an organization as are familiar with the strategic objectives of the organization, and they also know how to achieve them. They report directly to the chief executive officer.
Their tasks include: making better hiring decisions as they are good at identifying the job tasks they want to be done by an employee and by holding interviews, and are able to identify a candidate most fit for the vacancy. They also play a role in helping new employees adapt in the organization. They also organize for retirement benefits for employees who have been working for the company. They also make sure that the companies’ human capital adds value to the company. They therefore have the capability of influencing the laying down of non performing employees. They are also responsible for the company’s good relation with the surrounding community.
Therefore if you want your business to prosper, human capital importance is something you can not ignore. It is therefore good for you to invest in your employees.