Human capital

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Human capital
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Human Capital is accumulated by a person stock of employee's skills, knowledge, attributes, abilities to perform labor. Human capital may be expanded by trainings, schooling, medical care and is often meant as value of individual employee work. Companies are investing in people and at the same time employees are increasing their earnings.

Human capital theory

Human capital theory originated in 1960's and was developed by G. S. Becker. Human capital theory claims that all kinds of investments like trainings and education in employees results in greater efficiency at work. Higher qualifications of workers are resulting in better earnings. There are two possibilities that human capital is resulting in earnings:

  • Higher qualifications allows employees be more effective at their work,
  • Education does not affect on employees efficiency while his willingness, innate predisposition, talents increase productivity and result in earnings.

Investing in human capital generates costs. First type of costs are direct cost. Direct costs includes tuitions, books, courses. The second one is opportunity cost that is earnings that a person could get in time spend for education.

Human capital characteristics

Employees are a part of intellectual capital of every company.Intellectual capital is the most important resource because the value of a company is a value of work developed by employees.Right human capital management increase company's productivity. Human capital is owned by a person not by a company and it is an intangible asset.

There are two types of qualifications:

  • Specific qualifications that are raising employees productivity only when he uses them in that specific organization,


Author: Monika Stempień