Concept
Human Capital is the imaginary sum of what all of your employees can do. A stack of resumes is a poor approximation of an organization’s human capital; note that an MBA is not an MBA is not an MBA. As you can imagine, it’s difficult to measure a person’s abilities much less add those together with others’. Hence, it’s an intangible asset pool.
Example
Supposing you own a title company, which reviews and clears real estate titles for transfer to a buyer. After a couple of months, you could record how many titles your 30 employees could clear. Adding those up, you would have a rough estimate of the value of your human capital pool.
Diagram
Challenge
1. How many humans are in your organization?
2. What kinds of human skills are essential to your organization’s functioning?
3. How would you summarize the value of the human asset pool of your organization?