Scroll Top

search-icon
    drop-arrow

    Human Capital

    What is Human Capital?

    Human capital is an intangible asset or product that is not included in the balance sheet of a business. It can be defined as the economic value of the knowledge and skill of a worker. It includes attributes that employers value, such as loyalty and punctuality, schooling, training, knowledge, expertise, safety, and other stuff.

    It is understood by the concept of human capital that not all work is equal. Yet employers can improve the quality of that capital by investing in the employees through schooling, expertise, and skills. Such an attempt increases the economic value to both employers and the economy as a whole.

    Human capital is critical because efficiency and, therefore, profitability are perceived to increase. The more a company invests in its workers (i.e. in their training and education), the more successful and efficient it can be.

    Understanding the 'Human Capital'

    It is often said that an organization is just as good as its people. Central to its success are executives, staff, and members who make up the human resources of a company.

    Usually, human capital is handled by the human resources (HR) department of an organization. This department supervises the procurement, management, and development of staff.

    Other directives include planning and strategy of the workforce, recruitment, training, development of employees, and reporting and analysis.

    How to Calculate Human Capital?

    Although human capital is based on employee skills and knowledge investment through education, it is easy to calculate these investments in human capital. The total profits can be calculated by HR managers before and after any investment.

    Any human capital return on investment (ROI) can be calculated by dividing the total profits of the company by its overall human capital investment.

    Does Human Capital Depreciate?

    Human capital, like anything else, is not resistant to depreciation. This is often calculated in compensation or the ability to remain in the workplace. Unemployment, illness, mental decline, or the inability to keep up with creativity are the most common ways in which human capital can depreciate.

    Popular Topics

    Latest Articles

    Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

    Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

    CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

    Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

    Cleartax is a product by Defmacro Software Pvt. Ltd.

    Company PolicyTerms of use

    ISO

    ISO 27001

    Data Center

    SSL

    SSL Certified Site

    128-bit encryption