Human Capital

Human capital is an intangible measure of the quality of a firm’s employees. The level of a firm’s human capital can be gauged by the level of education, experience and skills of its employees.

Though it cannot be measured on a balance sheet or various other financial statements, human capital is critical to a firm’s success. Higher quality human capital will translate to increased productivity and profitability. Firm’s can grow human capital by compensating employee’s fairly and/or offering attractive benefits to workers in exchange for exceptional performance.

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