Three ways Human resources contributes to success

Human capital – Three ways Human resources contributes to success

When we think about all the things required to make any endeavor a success, the first thing that comes across our mind is capital. While land, equipment, investment and other tangible assets may be optional, human capital isn’t. Never has a business been created without human capital. The sheer commencement of an idea from where any business grows needs human capital! But if it is so important a thing, why do we not talk about it?

To start with, human capital is often confused with the term labour. Labour defines the employees hired to do physical and manual work in any industry and they’re part of the necessary assets too but definitely not a part of capital. Human capital has a wider definition. It not only includes the physical presence of people but also their skills and abilities to develop and innovate. It talks about the qualitative aspect along with the quantitative one. It is the basis of intellectual assets and adds to the combined knowledge of the firm.

Now that we’ve clearly defined and distinguished human capital from labour, let’s see as to why we need it. Human capital, being the only one with decision making ability, rationale and experience has the ability to choose the best from the rest and minimize opportunity cost which in turn is beneficial for the rest of the capital. Apart from that, we need the collective knowledge and skills of a number of people to perform almost every task including planning, management and execution. To say the least, it is never an option to get away with average or no human capital.

The need for it is so wide that it has now been assigned different areas in a single firm. While some go for research and analysis, others might favour project management or counselling and training. But whatever firm, whatever industry and whatever job it might be in any part of the world, the human capital can make it happen as for them- nothing is impossible.

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