Invest in Human Capital, Invest in our Development— Part 1

If you want to gain, you have to invest!

In life, you have to give in order to receive. This is the same in the business world: you have to invest in order to gain. Unfortunately, for different reasons such as the fear of risk or a lack of money, we choose not to invest, while still wanting to get the most out of life and business. But experience shows that the more you give, the more you get, so the more you invest, the more you gain. What you need to keep in mind is what you should invest in and how.

In the business world, one of the factors that determine a company’s success is its human capital. D&I, with its mission to create a better world through reshaping business, strongly believes that a high human capital is the key for all companies who want to be successful.

What is human capital?

Human capital is a measure of the skills, education, capacity, and quality of labor, which influence their productive capacity and earning potential. — Tejvan Pettinger

A company needs people with the right set of skills and knowledge in order to make more money and reach its goals. There are different factors when determining the human capital of an employee. What is the character of the employee? Do they have the personality traits and habits that the company is looking for? How are their social skills, and how well do they interact and communicate with others? What about their creativity? Do they have the ability to create new working practices or solve problems in an innovative way? How is their work ethic? Do they have integrity, a sense of responsibility, discipline, an emphasis on quality, and a high sense of teamwork? All of these factors along with the ones in the image above are factors to be considered when it comes to assessing the human capital of a company.

Why is human capital important?

On average, total human capital costs are almost 70% of a company’s operating expenses. — Anthony Jeanetta.

Human capital is important to a company and to the overall economy. If companies don’t invest in human capital development, their employees won’t develop the skills to keep the company going forward at its full potential in this fast developing era.

As important as human capital is for a company, it is for our economy. A lack of human capital development affects our lives, our social development, and our economy’s development. It increases levels of unemployment, low incomes, poor health, and social exclusion in our community.

With fast development in technology, machines are taking over routine or low-skill-level jobs. Our economy is becoming more intelligent and is depending more on information and higher knowledge-based sets of skills. This causes people with low-skill level to struggle to get employed.

People with a lack of skills are more likely to report poor health and lack of participation in our community. People with a higher level of human capital are more confident. They feel like they have a voice in their community and are able to bring changes in social and political life. This tends to bring inequality to our communities.

People with high skills and creativity tend to look for high-paying jobs for their skill level. If a country has a low-income level, it might prompt these people to move to other countries with a higher income level. This way, the country loses even more human capital and will have an even more poor economy.

Investing in human capital development will be beneficial for everyone. It is beneficial for improving your company’s ROI and our economic growth. Increasing the productivity of the employees, saving on employee turnover, and increasing customer engagement will all contribute to the overall increase of ROI. Investing in HCD is maximizing the return on human capital development.

Investing in improving our economy’s human capital is also cheaper in the long run than paying the price of poor health, low incomes, unemployment, and social exclusion. Having an educated, innovative, and creative workforce will also increase labor productivity and result in long-term economic growth.

Check out our following blog, Invest in Human Capital, Invest in our Development — Part 2 to see how investing in human capital development benefits a company’s organization communication and their company culture.