Wednesday, 17 December 2008

Remaining arguments for investing in human capital


   Here are my top five arguments for investing in human capital.  As I noted in my last post, the first of these is currently rather debatable (I think you can make a case for people being less important than cash at the moment), but I strongly believe that all of the other points still apply:


Human capital has become increasingly important to future returns (and therefore to market value)
Human capital will become more important again in the future, and will be key to turning the corner as well
Financial capital may have become more important again, but cash still needs people to spend it
People need even more support at the moment (see for example this post by Erik Berggren on SuccessFactors' Performance & Talent Management blog)
People account for a substantial proportion of organisational costs and this expenditure needs to be optimised.


What arguments would / do you use, and how have they changed over the last year?


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1 comment:

  1. My arguments depend upon what is needed for the firm in case.

    I find the explanations for redundancies in the press rather weak. I think we should make an alliance with key business journalists to help them ask the right questions. A firm who lets people go is saying one of two things: they had used people like Christmas decorations or they have lost market. Neither says a lot for it.

    Anyone investing in that firm or intending to join it should be asking a lot of questions about its future and its leadership. I would like to see those questions asked.


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