The success of a company comes from its people. Human capital management is a thriving force for any organization toward its target. Investments in human capital heavily influenced the growth of leading companies like Google, Adobe, and IBM. 

The companies’ efforts show how much they care for their employees – their most valuable asset. To maintain your competitive advantage in today’s unpredictable environment, understanding the value of your employees is a must.

What is human capital?

Human capital is the value represented by the skills and experience of employees. When properly deployed, human capital should result in a high level of productivity. Therefore, increasing a company’s market position, profits, and/or cash flows. “It may sound a little clichéd, but human capital is the most valuable asset an organization can have” says Richard Pummell, human resources lead at DevelopIntelligence.


Human capital is expected to be increased when the business invests in employee training. It’s not just formal training but also about hiring policies. In order to upscale the employee experience, they need to face more challenging positions. Job rotations can also be used to force employees to gain experience in a number of functional areas. 

When a business adapts human capital, their next concern should be how to retain their talents. To reduce the level of employee turnover, attention should be drawn to the work environment, offering competitive compensation and benefits, and training managers in proper supervisory skills. Otherwise, their talents may fall into the hands of their competitors.

> Read more: Unlimited Paid Leave – Does it actually work?

How do organizations get affected by it?

Employees make up a huge portion of every company. Individuals in a company’s workforce are responsible for its success or failure. If the organization employs people who have more education, more developed skills, and more work experience, it’ll be able to accomplish much more. 

However, human capital can migrate from one place to another. Companies that don’t give effort into retaining human capital can experience a “brain drain.” It occurs when human capital migrates from developing areas to urban and developed areas.


The same can happen to companies if they don’t value their employees. Data from an MRI network study shows that 25% of employees leave their job to seek more compensation.

Moreover, companies can easily lose human capital if they don’t give necessary advancement opportunities. 30% of employees leave their job due to a lack of career growth, according to the same survey.

How to increase human capital in the company?

 An existing way to increase human capital is to hire more people. However, it can be done within your company’s workforce. 

1. Improve education in the workforce

A highly educated workforce will be capable of achieving more.

There are many ways for a company to improve their workforce’s education such as providing training related to the company’s industry or sponsoring their employees to get their degrees or additional certifications. 

Leading companies also make sure that they are giving their employees opportunities to learn and improve their expertise in their work. This means giving them more decision-making authority, letting them pursue their ideas, or matching them with people they can learn from different projects. All of this allows them to prepare for more advanced roles in the organization.


From the finding from ThoughtSpot and the Harvard Business Review in 2012, only 20% of organizations are giving their front-line employees authority. However, those organizations were most likely among the respondents to have seen more than 10% annual growth in revenue in recent years.

2. Make room for employees to be creative

Creativity is a valuable skill for any company to foster within their culture. Creativity in business is a way of thinking that inspires, challenges, and helps people to find innovative solutions and create opportunities out of problems.

Linkedin named creative thinking the most demanded skill nowadays. Other researchers have also placed it in the top 3 required skills to run a business.

In order to surpass the competition, it’s crucial for organizations to bring in new and different things for the customers. Having employees that come up with new ideas and execute them exceed the expectations, they need a culture that provides a supportive environment that opens to innovative ideas.

It’s important to reward creativity and offer people the flexibility to work their own way and think outside the box. Companies also need to offer employees time to recharge and not pressure them into delivering results right away.

Read more: How many hours per week should you really be working?

3. Diversify the workforce

A diverse workforce is made up of people from a variety of backgrounds.

According to a recent McKinsey study, executive teams with gender diversity are 25% more likely to achieve financial outperformance. The case for ethnic diversity is even better at 36%.


Organizations that have more diversity in their office receive higher productivity. That is because different workers have different skills, abilities, and areas of work that they enjoy. Additionally, organizations that boast a more diverse leadership team find that employees are more forthcoming with suggestions, more creative, and have added insight to offer (Deloitte). Then leads to more productive work sessions and better results overall.

Employees that see diversity in the workplace around them have an overall more positive opinion of their company. According to Glassdoor, two-thirds of job seekers say that diversity in an organization is an important factor for them. When organizations work to meet those expectations, employees are more satisfied.

By creating an employee-centered company culture, employees will be drawn to your company and want to stay. Consequently, it will only serve to continue the cycle of positive culture. Investing in human capital can lead to employees producing more revenue and profit for the company. In the end, that will benefit them in the long run. 

The JobHopin Team