Human capital refers to the collective skills, knowledge, experience, and competencies possessed by individuals—especially employees—that contribute to an organization’s productivity and long-term value. While closely related to the concept of human resources, the term human capital emphasizes the economic value of people as assets, comparable to other resources such as financial capital or physical assets.
This economic framing of human ability has sparked debate, as it reduces people to quantifiable capital, potentially overlooking their intrinsic value, dignity, and individuality. Despite this controversy, the concept plays a central role in human capital accounting and workforce planning, particularly when evaluating investments in training, development, and knowledge management.
Organizations increasingly recognize human capital as a key driver of innovation, organizational performance, and competitive advantage, making it a critical focus in both strategic HR and corporate reporting.
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