Human resource and human capital are two terms that are extremely similar in that they both relate to present or potential human skills, talents, and talent that are critical to any organization's success.
The two notions are frequently misunderstood and improperly conflated. There are a few minor but significant distinctions between what is intended by human resources and what is meant by human 'capital.'
The article provides a comprehensive explanation of what each of these terms implies, discusses how they are similar, and illustrates the slight but significant distinctions between them.
The skills, training, experience, education, information, know-how, and competencies that humans today provide to a corporation are referred to as human capital. In other words, human capital is the value that a person brings to a firm, which can be assessed by the employee's skills and competencies.
Human capital is a crucial component of production, and employing people with the appropriate education, experience, skills, and training may boost efficiency, productivity, and profitability.
Companies can invest in their employees' human capital by providing training and education opportunities. Employee development and training can help them gain a broader set of skills and abilities while also lowering the cost of acquiring more employees with the required competencies.
One thing to keep in mind is that individuals are not all created equal and that human capital can be developed in a variety of ways to maximize the firm's economic worth.
Understanding the concept of resources is the simplest method to explain human resources. Resources are asset pools from which assets can be pulled as needed until the pool of assets is depleted.
Human resources are comparable in that they represent a pool of human skills, knowledge, and expertise that can be called upon when needed. In other words, it is the boundless human potential that has the potential to increase efficiency, production, and profitability.
What is the difference between Human Resources and Human Capital?
Human capital and human resources are closely related because they both consider how current and potential human skills might be put to the best possible use in order to maximize efficiency and profitability.
Human resources are the human potential that can be pulled from a large pool of resources, whereas human capital is the human capital that can be obtained from a limited pool of resources. Human capital refers to the skills and knowledge that have already been acquired and put to use.
In order for human resources to be realized, they must be hired, trained, developed, and given opportunities and challenges. Human resources can be transformed to human capital over time, which is defined as human skills, capabilities, and competencies that have been invested and engaged in corporate operations while producing outcomes and output.
Human Resources vs Human Capital
- Human resources and human capital are two terms that are extremely similar in that they both relate to present or potential human skills, talents, and talent that are critical to any organization's success.
- The skills, training, experience, education, information, know-how, and competencies that humans today provide to a corporation are referred to as human capital.
- Human resources are a pool of human talents, knowledge, and expertise that may be tapped into and expanded as needed.