Small Business Glossary and Definitions

Human Capital is the value employees bring to an organization in terms of their skills, competencies, knowledge, innovation, and performance.

Employers have an interest in human capital since the value of an employee’s contribution has a direct impact on an organization’s success. Developing human capital entails encouraging continuing education, providing a motivating work environment, and recognizing the contributions that individuals bring to the organization. An organization that recognizes and invests in its human capital often have higher staff retention and increased success, revenue and profitability that results from motivated employee performance.

Investing in human capital through training and providing fulfilling work experience benefits an organization’s by enhancing its reputation, retaining quality employees, and increasing potential income for both the employee and the organization.