Human Capital Management-An Organization’s Most Valuable Intangible Asset

By Navin M Raheja, CMD, Raheja Developers


Navin M Raheja, CMD, Raheja Developers

Human Capital Management is a process that ensure the right candidate is hired for the right job, trained from time to time, managed well and also retained in the organization. Human capital management makes the best possible use of skills and experiences of employees and motivates them to deliver their level best. Human capital management help in extracting the best out of individual, eventually benting the organization and yielding higher profits.

Employees are the lifeline of their organization. Individuals who spend maximum part of their day contributing towards the success of an organization are its most crucial resource. Employees can either make or break an organization, truly making them an organization’s lifeline.

An organization can’t survive if there are no employees. Employees ought to be motivated from time to time so that they develop a sense of attachment towards their organization and also deliver their best.

Every employee in his/her tenure acquires some set of skills through his experience, exposure, trainings and so on which further increase his/her productivity eventually benefitting the organization. Knowledge and expertise which employees develop in due course of time to further increase the productivity of organizations refer to human capital. Every employee tries his level best to sharpen his/her skills during his stint with the organization. Human capital is the collective stock of skills, attributes, knowledge, and expertise of employees which further plays an integral role in increasing the productivity of the organization.

Every organization invests its money and resources to train new employees. Employees in turn work hard, upgrade their existing knowledge and contribute in their own way to increase the productivity of their organization.

Human Capital management plays an important role in the recruitment process. It ensures that human resource professionals hire individuals who really deserve to be in the organization. Recruiting the right talent is of utmost importance. An individual who is not fit for a particular role will not be able to contribute much in the long run.

Talent acquisition is one of the most crucial responsibilities of human resource professionals, often neglected in most organizations. Do not hire someone just because you need to fill a vacant position or your superiors have asked you to do so. Analyze the background of an individual thoroughly. Try to find out why someone really wants to join your organization? An individual who has been assigned the role of acquiring new talents should not forget to check an applicant’s past experience, interests, professional qualification and reasons for changing previous job. If you really like someone, try to do some reference check as well. Do discuss with the applicant before calling up his previous organization or boss, else it might land him/her in trouble.

Human Capital management plays an important role in orienting a new employee to the system. Boring and meaningless induction programs lead to confusions and an employee eventually loses interest in the organization. Do not load someone with unnecessary information, the very first day he steps into the organization. Make him feel comfortable. Ask him/her not to bring lunch from home. Order lunch from outside and ask all his team members to have lunch together. Such small initiatives go a long way in breaking ice among team members.

Human Capital Management helps in training the employees and making them indispensable resource for the organization. Motivate employees to take up special courses or online programs which would help them in their job. Employees who do not brush up on their skills from time to time find it difficult to survive in the long run. Inculcate the habit of reading. Internet is also one of the good options to keep oneself abreast with the latest developments.


Human Capital Management benefits:

  • Human capital management helps in extracting the best out of employees.
  • Human Capital Management enables the human resource professionals to hire the right candidate for the right role.
  • Human Capital management enables free flow of information between superiors and subordinates
  • Trainings and skill development activities are essential for upgrading the existing


Ways for an individual to boost his/her human capital:

  • Every employee should strive hard to increase his/her value in the organization
  • Remember there is no age limit for education
  • Don’t just restrict yourself to a nine to five job.
  • Try to get involved as much as you can.
  • Information sharing also increases the efficiency of employees and eventually human capital.
  • Volunteer for various training and skill development activities.
  • Start your day with a smile.

Employees - their knowledge, experience, skills, innovative ideas, and concepts are all valued possessions within an organization. An organization must understand its employees well to expect the best from them. Human capital management refers to developing strategies to hire, manage, train, develop and retain top performing employees.

The components of a strategic human capital plan should be: Clarity in Direction; Clarity inhuman capital goals; strategies/policies to accomplish already defined goals and objectives; A foolproof implementation Plan and An accountability system.

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