How do companies measure and understand the amount of investment to be made in human capital ? What could be the parameters that determine this ?
Can you please elaborate further in which context it is required. In order to measure, the value of human resource, various models are there in Human Resource Accounting. We have a model developed by Lev and Schwartz in the year 1971 which involves determining the value of HR according to present value of estimated future earnings discounted by the rate of return on Investment.In case, the question is regarding human resource aspect, human resource management may be useful, not accounting.
Sanjeev Bansal Thank you Sir. I m looking at this from the HR perspective.
The World Economic Forum uses the following factors on a scale of 0 -100:
CAPACITY
DEVELOPMENT
DEVELOPMENT
KNOW- HOW
For the current annjal report, download at this link.
http://reports.weforum.org/global-human-capital-report-2017/b-technical-notes/
The World Bank also issues its own version called the World Cevelopment Report. See
http://www.worldbank.org
Where I work, we see investment in the longer term in both capability building & health, and accordingly take a very holistic view and make investment.
Ali Ahmadi
, Paul Louangrath , Paul Louangrath .. Thank you so much ... will look up on the papers, links cited.
Dear Friends and Colleagues of RG, Is the significance of human capital changing due to the ongoing fourth technological revolution of Industry 4.0?
Please reply
I invite you to the discussion
Thank you very much
Best wishes
In the context of the above considerations, the following question is also current:
- Is the significance of human capital changing due to the ongoing fourth technological revolution known as Industry 4.0?
- Can the role of human capital decrease in the perspective of the next 20-30 years due to the development of Information Technology Industry 4.0?
- How will the labor market change? Will robotics change the labor market by reducing jobs for people? Will new kinds of professions and jobs for people be created?
The current technological revolution, known as Industry 4.0, is determined by the development of the following technologies of advanced information processing: Big Data database technologies, cloud computing, machine learning, Internet of Things, artificial intelligence, Business Intelligence and other advanced data mining technologies. How will the current technological revolution Industry 4.0 change the labor market in the next 20-30 years?
Some analyzes of the prospects for the development of labor markets suggest that due to the development of information technology Industry 4.0 in 2030, 70 percent. professions and workplaces will be new types of professions, specializations, etc. in the scope of work performed by people, whose names we do not know yet.
Will new types of professions and workplaces for people be created in connection with the development of Information Technology Industry 4.0, which will be a kind of buffer for the reduction of other jobs due to progressive robotization, implementation of artificial intelligence, Internet of Things to the processes of production of goods?
Please reply
I invite you to the discussion
Thank you very much
Best wishes
Muhammad Shujaat Mubarik has done a lot of work on human capital measurement in his studies. He has developed a comprehensive indexed to measure Human capital. for your reference plz see the given link. i hope you will find EXACT answer of your question.
[Human capital and performance of small & medium manufacturing enterprises: a study of Pakistan, MS Mubarik - 2015]
Link:
studentsrepo.um.edu.my/65731/Shujaat_Mubarik_Thesis_Final_Submission_.pdf
Human capital is an intangible asset that is not listed on company's balance sheet. It is usually measured by HR department which oversees workforce managment and optimization. Also, they can calculate return on investment (ROI) in human capital by dividing company's total profits by investments in human capital.
As mentioned earlier by Kristina Grbić , I am also of the opinion that Human Capital belongs to the category of intangible assets.
If we ask ourselves what could be the requirements for achieving optimum productivity from a person working in a particular field, and which are intrinsic /inherent to the person ? Answers to this question could constitute the various parameters to measure human capital.
To illustrate this, I would like to take the example of a person aspiring for a Research Fellowship in a university department, say Chemistry. In this case, some of the requirements from her/ him could be: (a) thorough knowledge in the subject, (b) an analytical mind (c) capability for minute observation (d) tenacity for facing and learning from failures (e) lots of patience etc. and etc. These listed attributes of the concerned person could be, in this case, the parameters to measure the human capital.
It is to be noted that the parameters could vary, depending among others, on the field of work, the organisation etc.
