What is Human Capital?
Human capital is the skill, talent, andthat employees bring to a company. Coined by University of Chicago Theodore Schultz in 1964, the refers to produced by in knowledge.
How Human Capital Works
Better skills can increase an employee's value in the workplace, and an employer that obtains highly skilled employees can therefore
Accordingly, companies are usually very interested in in and acquiring human capital. They do this via recruiting new employees, training existing employees, and ensuring that the relationships between employees and their managers are positive.
There are two kinds of human capital: specific and general.
Specific human capital refers to knowledge and skills that few find useful and are willing to pay for. For example, knowing how to operate a proprietary machine that is owned and operated by Company XYZ might be a skill that only Company XYZ is willing to pay for.
General human capital refers to knowledge and skills that many employers find useful, such as knowing, knowing how to transplant a heart, or knowing how to design a bridge.
Why Human Capital Matters
Employment is essentially the purchase andof human capital: employees own their talents, skills, and time, and they sell these assets to companies in return for .
This is the idea underlying the philosophy that employees are really consultants who sell their time and expertise to clients, and that the value of one's labor is not always based on his or her amount of physical exertion but on the market value of his or her knowledge and skills.
Human capital tends to migrate in global economies, most often from poor places to richer places. Some argue that this 'brain drain' makes poor places poorer and rich places richer.