Capable executives aren t just hard to come by companies are waging a war for talent. While all these metaphors help us understand why people are valuable to companies, the notion of people as owners and investors of human capital is particularly rich. More to the point, I think it better captures the underlying truths of working life than the idea that people are mere assets, deployed at the whim of their owners like so many forklifts. As a term, human capital suffers the same fate as many compelling and widely adopted metaphors broad acceptance but imprecise usage. So, I ll make a modest contribution by proposing a definition.
Human capital comprises all the intangible assets that people bring to their jobs.
It s the currency of work, the specie that workers trade for financial and other rewards. The term first appeared in a 1961 American Economic Review article, Investment in Human Capital , by Nobel-Prize winning economist Theodore W. Schultz. Economists, academics, and consultants have since loaded many notions into the human capital portmanteau. Like all good metaphors, the idea of human capital gains potency as you explore tangential metaphors spin-offs, if you will. Let s have a quick look at some of the more enlightening spin-offs from human capital.