Why Human Capital Is Your Company’s Greatest Asset
Human capital is an asset consisting of the knowledge and skills held by a person that can be used by an organization to advance its goals. Many companies don’t understand why human capital is such an asset to their company. To ignore the importance of this asset is to risk moving your company forward.
While machines, technology and data are important to help companies reach their goals, some level of human knowledge and skills are needed for an organization to accomplish anything. Tapping into this unrecognized potential is vital for a successful company. Investing in your capital will incentivize employees to become more involved. They will be eager to reach goals set by the organization and this will boost morale. The domino effect won’t stop there. As employee satisfaction increases, quality hires will be easier to retain and turnover will decrease. This means less capital needs to be spent on recruiting and training, leaving more to be invested in your current employees.
Human capital can be increased through education and training. When new members are brought into the team, their capital is low. As they prove themselves to be eager and willing to take on projects that will move the organization forward, their capital can be increased by investing in their education. Broadening their skill set and expanding their knowledge base will allow them to further advance the company towards obtaining their goals.
Why is it so important to recognize human capital? You will see a greater company culture. Employees want to learn, they want to advance their career and they want to enjoy their place of employment. Having a positive company culture will lead to engaged and happy employees which, in turn, will increase productivity and improve your bottom line.
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