Human capital is the stock of knowledge, habits, social and personality attributes, including creativity, embodied in the employer’s ability to perform well.
Alternatively, human capital is a collection of resources—all the knowledge, talents, skills, abilities, experience, intelligence, training, judgment, and wisdom possessed individually and collectively by individuals in a population, in this case a company. These resources are the total capacity of the people that represents a form of wealth which can be directed to accomplish the goals of the nation or state or a portion thereof.
If a company supports and aspires to carry out human capital management (HCM), employees are viewed as valuable assets with quantifiable value that can be increased through specific and measurable management techniques and human capital solutions. Almost every company today will state that their employees are their most important and thus valuable asset. Implementing human capital solutions therefore equals investing a considerable amount of time and money in training and recruiting people to enhance their interpersonal skills.
Human capital solutions offer companies a better way to measure evaluate employees performance and therefore employee success. This way, human capital solutions can lead to meeting company ROI requirements.
Companies can only effectively apply human capital activities if the business strategies are aligned with the human capital solutions.