What is Human Capital? Understand The Definition, Function And Types

Illustration of human capital (Photo: Pixabay/magnetism)

YOGYAKARTA – What is human capital? Human capital is human capital that is directly involved or participates in the production process. In companies, human capital is considered valuable capital that needs to be increased in value in order to provide large profits.

For more details, see the summary of information about the meaning of human capital, functions and tasks, along with its types in the following article.

What is Human Capital?

According to Claudia Goldin and Lawrence F. work to generate economic value.

Meanwhile, according to Investopedia, human capital is the economic value of the experience and skills possessed by a worker. These values include education, training, skills, intelligence and health.

What are the Functions and Duties of Human Capital?

Generally, every company has a human capital department whose function is to increase employee or employee productivity.

Adapted from the Oracle page, the following are a series of functions and tasks of human capital in a company:

• Recruit and retain competent human resources: Human capital allows companies to recruit effectively and efficiently and get the right candidates. Apart from that, human capital also helps retain employees who are considered competent so they can continue to develop and support the company's growth.
• Helping employees quickly adapt to changes: In a company, human capital can also help employees quickly and agilely adapt to changes that occur in the organization or company.
• Streamline HR operations: The human capital division also functions to consolidate various different HR management systems and utilize analytical data to make more precise decisions regarding workforce, so that HR operations become leaner.

What are the Types of Human Capital?

Adapted from the Better Up page, human capital is divided into three types, including:

• Knowledge capital: This is capital obtained from the process of learning and practicing. Knowledge capital includes intelligence, education obtained at school, academic degrees, work experience, general knowledge, and hard skills.
• Social capital: Social capital is capital that is related to relationships and social life. This capital includes relationships with other people, social status, professional networks, health, and a person's popularity or fame.
• Emotional capital: This is capital related to emotional abilities and soft skills. Emotional capital includes creativity, emotional intelligence, problem solving abilities, critical thinking abilities, loyalty, leadership attitudes, and a strong personality.

That is information about what human capital is. Hopefully this article can broaden the insight of loyal VOI.ID readers.