Human capital

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The part of organization's intangible assets which is embedded in people working in the organization and is based on people's knowledge, skills and competences


Human asset is a part of an organization's intangible assets (see Fig 1). It includes the knowledge, skills, competencies and qualifications of the people in the organization. In addition, human asset includes organizational knowledge, teams, networks and communities of practice. One could say that human asset is the part of organization's assets that walks out every day and is not as straightforward to manage as tangible assets.

Human asset refers to an economical view of human resources. When the human resources of an organisation are viewed as an asset, there is an expectation that human resources provide the organisation with actual or future value and benefits. Thus, training and other methods for developing the human resources are seen as an investment in the organisation's assets.

Management of human assets

Human assets are managed as a part of organisation's asset management and there are several human asset related business processes available in all organisations.

The uncertainty related to human assets derives from the uncertainty related to human assets embedded in individual people who could leave the organisation on a short notice. One approach to diminish this uncertainty and manage the involved risk, is to ensure that critical assets are not only embedded in individuals but also in groups of people and thus not too dependent on one individual. Knowledge management provides tools and processes for diffusing human assets to teams and communities and, when appropriate, document it.

When considering development of their human assets, an organisation may choose to import new human resources via recruitment, develop the exiting human resources via individual learning or develop it's organisational knowledge e.g. via communities.

Typical processes available for development of human assets in organisations include

Fig 1. Human asset as a part of organization's intangible assets.