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Human Capital

In: Business and Management

Submitted By bookreader451
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Human Capital Every business relies on their personnel. Without a strong workforce a company cannot thrive and be successful in an ever changing corporate environment. Leslie Weatherly maintains that this human capital is a company asset like any other. In the article “Human Capital – The Elusive Asset” Weatherly presents a definition of human capital and strategies for measuring the actual value of human capital assets and the ROI it provides to the company’s bottom line. If human capital is seen as the collective sum of the attributes, life experience, knowledge, inventiveness, energy and enthusiasm that people invest in their work (Weatherly) how can this be possibly be measured and put on a balance sheet as an asset? The truth is it cannot. GAAP standards cannot account for the intangible human capital within an organization. Recruiting, salaries and training and are expenses incurred for finding and developing human capital but they cannot be expensed against the tactic knowledge, professional certification or education an individual brings to an organization. It is the intangible elements of human capital that hold the most value, but are the most challenging to place a value on. An example of this is the recruiting methods of what are called Big Law jobs. Large firms in major cities recruit from a small number of elite schools. The law schools themselves have an intangible value that translates into actual value for the firm. The firm uses the value of the school in passing the work done by those associates as valuable services to their clients. The recruits coming from these law schools are considered to have superior professional qualifications than those from lower ranked schools; this intangible value is readily translated into bottom line billable hours for the firm. Each company, regardless of the industry,...

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