What is human capital?
You are probably familiar with the term, but you may not be entirely sure what it means. Eliane Bacha, Associate Professor of Management and Leadership at SKEMA Business School, explains human capital.
Human capital can be defined as the intellectual, personal and mental “assets” a person acquires over the course of their life. These help them to evolve, progress, and feel good. They include the person’s education, experiences, skills, expertise, knowledge and mental health. Human capital enables a person to differentiate themselves from others, and allows the company employing them to benefit from added value and a competitive advantage.
But investing in human capital is not always easy or feasible, particularly for small organisations with a limited budget for employee training and development. Nevertheless, for companies looking to increase their competitiveness, investing in human capital can be a strategic opportunity.
Investing in human capital
This can include initiatives such as:
- Providing training so employees can learn new skills or update their existing ones.
- Supporting the mental health of employees by providing a healthy environment conducive to work and to personal and professional fulfilment.
- Helping employees with their career development so they may progress in their professional lives and move up through the ranks.
- It is also in the interest of companies to ensure that employees have a good work-life balance.
- And finally, showing employees recognition and appreciation increases their motivation and commitment to the company and builds loyalty.
An increasing priority
Companies today recognise the importance of human capital. According to CIDFP, a centre offering vocational training, nearly 5.2 million training courses were funded through the French CPF (Personal Training Account) scheme in 2022. This represents a 15% increase compared to 2021.
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To give an example of what some companies are doing, Capgemini offers training through its “Capgemini University”, while Orange has launched a programme called “Orange Campus”, to help its employees acquire managerial and digital skills.
More than half of French employees took a training course to learn new skills in 2023, a year that saw corporate training budgets increase by 12% compared to 2022.
Video produced in partnership with FNEGE.
