What is Human Capital?

Human capital (HC) is an intangible asset that is a sum of the economic value of employees’ experience and skills. The ‘capital,’ in this instance, refers to assets such as knowledge, skills, health, education, etc. There is a distinct difference between human resources and human capital. 

Resources often imply that it is a finite source or that it can be exploited (the term has also been associated with materials, manufacturing, etc.). This is obviously not the way ‘human resources’ is seen. However, the association tends to strongly imply the above meaning. On the other hand, human capital implies, for example, wealth that can be invested in. Talentalign created this diagram which shows the various aspects of HR and HC. It illustrates how they are similar but also differ: