What Is the Importance of Human Capital?

Human capital, also known as "intangible capital." As opposed to "material capital". Western economics concepts. Capital embodied in workers. Such as workers' knowledge and skills, cultural and technological level, and health status. Its main feature is that it is associated with personal freedom and does not shift with the sale of the product. Formed through human investment. It mainly includes: (1) expenditures for education; (2) expenditures for health care; (3) expenditures for domestic labor mobility; and (4) expenditures for immigration. The most important of these is education expenditure, which forms the educational capital. Through education, the quality of labor force, working ability and technical level of laborers can be improved, thereby increasing labor productivity. Its growth, especially education spending, is one of the sources of economic growth. ^[1]

human capital

(Glossary)

Human capital, also known as "intangible capital." As opposed to "material capital". Western economics concepts. Capital embodied in workers. Such as workers' knowledge and skills, cultural and technological level, and health status. Its main feature is that it is associated with personal freedom and does not shift with the sale of the product. Formed through human investment. It mainly includes: (1) expenditures for education; (2) expenditures for health care; (3) expenditures for domestic labor mobility; and (4) expenditures for immigration. The most important of these is education expenditure, which forms the educational capital. Through education, the quality of labor force, working ability and technical level of laborers can be improved, thereby increasing labor productivity. Its growth, especially education spending, is one of the sources of economic growth. ^[1]

Comparison of human capital and other capital

Human capital has greater value-added space than hard capital such as material and currency. Especially in the post-industrial period and the early stage of the knowledge economy, human capital will have greater potential for appreciation. Because human capital as "living capital" is innovative and creative, and has effective resource allocation and adjustment.

Labor costs are rising rapidly: The international and domestic economies are down, and corporate sales are falling sharply, while raw material costs, especially labor costs, are rapidly rising, which makes companies that are not profitable in the fierce market competition even more troubled.

The development trend of Chinese enterprises is developing towards multi-organization, multi-format and multi-group. Human resources need to create an HR management and control model and execution system that can dynamically balance and match strategy.

Need to establish and develop a talent supply chain system centered on capabilities. Need to optimize labor management, improve the level of refined labor management, and reduce labor costs.

Enterprises should perform quantitative analysis on human capital and establish an effective model for human capital evaluation. Transition to measurable human capital management

Integrate and improve the efficiency of various human resources administrative management; use HR shared service model to improve work efficiency and service quality

Six major issues have long plagued human capital managers:

First, whether power is "released" or "received". Changes in business models and corporate strategies, product diversification, and market and business expansion all bring new challenges to corporate management and increase management difficulty.

Second, the implementation of decision-making is "no power". A large number of professional managers gradually entered the operating body of the company. Gradually, the "personal charm" of the founder decreased, the tacit understanding between middle managers and senior management decreased, and the execution of company decisions and the development of the company depended on the individual of the highest decision maker. Gradually unsustainable.

Third, how to "differentiate" management. The external environment and foundation of companies in different regions, companies with different businesses, and even projects with different cycles are not the same. How to implement differentiated management of human capital under the overall company principle?

4. "Recruits" and "Old Ministers". "New and old" conflicts are a common problem in private enterprises.

Fifth, "Miao Miao fuels" as a last resort. in

First, the practice of education and economic development shows that education growth and economic growth are not always directly proportional.

Secondly, education and educational products cannot perform strict and accurate cost accounting and

The impact of human capital on corporate culture is:

(1) Emphasize collaboration and teamwork. The realization of enterprise management goals no longer mainly depends on assignments and orders, but more on the cooperation and cooperation between members. The company is committed to fostering a "team spirit" so that each member can find their sense of belonging, mission, mutual understanding and collaboration.

(2) Emphasize that the abilities of individuals vary widely. Motorola employees have to submit a summary every quarter. The first one is: Do you think the current job is consistent with your own ability? This is exactly the opposite of our traditional concept. We always think that there is no existence between people. The difference in abilities, the contribution of each person is only determined by the division of labor.

(3) Emphasize different ways of people's income. Because the capabilities of employees are very different, their contributions to the company are different, and their contribution methods are different, so their benefits are also different. For ordinary employees, labor income is obtained only according to their labor volume and contract, while human capital must not only obtain labor income, but also corresponding property rights income. The size of property rights income is calculated by discounting its own value into shares.

(4) Emphasize that there is a large income gap between individuals. The wage differential in Asia (the ratio of the highest wage to the lowest wage) is 700 times, the US is 1,300 times, and our country is only 5-6 times. Even this is 5 to 6 times. Human capital must be remunerated accordingly. If the remuneration is not enough to compensate for its depletion or to reflect its value, then technicians have no incentive to carry out technological innovation, and entrepreneurs have no incentive to devote themselves to business activities.