What is human capital?

Human capital refers to the collective knowledge, abilities and experience of a workforce in an organization. This phrase is used to denote the view that employees are valued assets within an organization and perform productive work that contributes to the bottom line.

While companies rely on property, equipment and work processes to operate, the level of human talent in an organization separates it from competitors. To maintain a high level of performance, companies often have specific educational and work background requirements for employees in given positions. The more qualified workers are that perform certain activities, the more value the business derives from its human capital.