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Example of Human Capital

The 'human capital' is the sum of knowledge, experience, talents and productive capabilities of the workforce. The theory is that human capital expands and develops, becoming more efficient and more productive as competencies and skills evolve. The concept is sometimes oversimplified as just knowledge and abilities, overlooking the research and development areas common to all skills and information. A further ramification of "human capital' is the ability to train others and to enhance productivity through shared knowledge.

Examples of Human Capital:

A business has the following personnel:

An experienced manager
An experienced accountant
5 experienced sales people
2 experienced production line supervisors
20 experienced production line workers
10 new trainees

The human capital of this business is obviously healthy and likely to increase in productivity.


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