The concept HUMAN CAPITAL is one of the Key Processes that need to be controlled in an organization. It refers to Education (Ensuring that the correct person for the job is appointed), On-the-job Development and Work Experience of the Workforce. Measure of the economic value of an employee’s skill set. Education is an investment in human capital that pays off in terms of higher productivity

The Workforce is an asset to the organization and should be protected, but also carefully selected before “buying” this asset. When an organization invest in human capital as an asset, this asset should ensure that the organization show improvement of the Quality of Work. Therefore in today’s economic era no organization can afford to “buy” an asset without a benefit.

The most important benefit for an organization when investing in human capital is that it contributes to the ultimate goal of SUSTAINABILITY of the organisation, thus ensuring economic growth, retaining of capital, Improvement of a quality workforce converting your organizational processes into profitability.

While economists have been able to demonstrate a statistical relationship between education and earnings, they have not been able to conclusively show a cause-and-effect relationship. That is, while higher earnings are associated with more education, it has yet to be conclusively shown that more education leads to higher earnings. The theory that more education is a causative factor in higher earnings has been attached on two points. One is the ability to perform the work, or the fact that more-highly educated individual are also likely to have the ability, self-discipline, and motivation that also result in higher earnings. Such individuals tend to do well in the labor market, it is argued, not because of their education, but because of other abilities.

A second critique of the human capital theory is the screening hypothesis, which states that higher levels of education serve to grade and label individuals in the job market. That is, higher levels of education do not necessarily make individuals more productive, they simply give people credentials that are then associated with higher-paying jobs. If this criticism is valid, then it can be argued that greater social expenditures on education may not result in as much increased economic productivity as the human capital model would suggest.

At PRIME LINK we support the latter in which it does not necessarily means that higher levels of education means more productivity and therefore we recommend that the Recruitment and Selection processes of an organization should be much more intensively controlled.

Remember, in order to control a process you need to define specific criteria that is required for the process INPUTS, CONVERSION and OUTPUTS.

In Recruitment, The exact OUTPUTS of the person(s) Job should be the Criteria that you need to measure when you interview the person. E.g. If the person is required to work in a team and communicate with others on a daily basis, this should be properly tested prior to appointment. Therefore, Prime link screen our candidates for the exact job requirements before we recommend them for placement.

Once the “asset” / Person is appointed, those criteria should be measured and risk / development areas should be identified during the 3 months’ probation period in order to make an informed decision whether it is the correct person / not. This is where the Human Capital Landscape comes in to play: *Attract, *Deploy, *Retain, *Optimise

The Human Capital Strategy in the Organization should then further include the following components:

  1. Competency Development
  2. Management of Learning (Career Pathing)
  3. Performance Evaluation
  4. Promoting Involvement
  5. System Enhancement
  6. Organizational Integration (Preventing working in silo’s)
Human capital business diagram management strategy concept chart illustration

Human capital business diagram management strategy concept chart illustration

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