Human Capital: The Biggest Investment We Need to Do
The most important resource in any economy or organisation is the human capital. Human capital is the collective knowledge, attributes, skills, experience, and health of an individual.
Human capital starts in early childhood and continues through formal education. Human capital has a huge impact on the success of not just individuals, but also companies and the economy.
What is Human Capital?
Human capital is an intangible asset or quality that cannot be listed on a company’s balance sheet. Improvement in productivity and a company’s profitability is linked to human capital. The more investment a company make in its employees, the chances of its productivity and success increase.
An organisation is only as good as its people which is why human capital is important to a company. Companies recruit individuals based on the attributes listed earlier such as skills, experience, and knowledge. Everyone is different due to unique circumstances, capabilities, and life experiences but attributes belong to the individual and they decide where to put them to work. Individuals are the product of geography, family, and education and their starting point matters. Career options depend on an individual’s abilities and attributes, their network, family obligations, health of the job market, and societal factors.
Human capital depreciation can be measured in wages or the ability to stay in the workforce. The common ways for human capital to decline is unemployment, injury, mental decline, or inability to keep up with innovation. Companies that do not value their employees by not giving them a platform for self-development and advancement will see employees leave.
How to Increase Human Capital?
Human capital is an asset that individuals have control over to make themselves more attractive to their current employer and potential future employers. Here are several ways to improve your human capital:
Learn New Skills
Widening our skill set by learning new skills or understanding upcoming technologies will improve human capital. Gaining new skills or information will open new opportunities in your day-to-day, projects, and potential new roles. Learning new skills can help widen your mindset to be more open to new methods of working or new technologies that could help advance your current role but also your company.
Continuous Improvement
Never stop learning and improving. Our current skills have got your current role however, the world continues to evolve and change. To stay current with the latest methodologies, market trends, and new technologies; continuous training and improvement is needed. By continuing to learn and improve you will refine your current skills and adapt to the ever-changing environment. The skills we had when we joined a company a few years ago may not be suitable in today’s environment. It is important to never stop development and continue to seek self-development opportunities.
Get Out of Your Comfort Zone
By human nature, we are scared to get out of our comfort zone. When we think or get in a situation outside of our comfort zone our minds are putting doubts in our minds to get ourselves out of the situation. It is better to pursue new experiences that will help your self-development. To gain new skills and experiences you will need to get out of your comfortable environment that will challenge you and your current understanding or skills.
Failure is Success
Although not many of us like failure and see failure negatively; failure should be seen as an improvement to self-development. Failure allows us to experience ways not to do a particular task or complete a particular aspect of a project. Failure enables us to reflect retrospectively and changes our approach to future projects or similar scenarios. Failure can add more value to your development and understand that success could. Do not let failure deter you from your pursuit of your career advancement. Embrace, learn and develop from it and continue to push forward and pursue advancement.
Focusing On Your Health and Wellbeing
Ultimately focusing on your health and wellbeing should be your number one priority. Your health and well-being will allow you to pursue all the above points. For example, having enough sleep will allow your brain to recover and digest the information you have taken during the day. A refreshed brain will enable you to digest new information efficiently. Focusing on your health and well-being will ensure your body is at its optimum state to accept new challenges and learn.
Summary
Human capital is about an individual’s attributes that they bring to a workplace. These are in control of the individual and need constant investment either from the employee or the individual. Individuals should look to find ways to improve their human capital to open opportunities within their current company or outside. Human capital will be the biggest investment we have as it will bring economical and social benefits.