Human capital… investing in people, building knowledge

Human capital is an investment and is defined as:

The combined knowledge, skill, innovativeness and ability of the company’s individual employees to meet the task at hand.

This definition is based on the one developed by Skandia AFS, a pioneer in the field of measuring human capital (from Beyond Knowledge Management: Lessons from Japan, by Hirotaka Takeuchi, 1998).

Measurement Method

Several indicators were selected based on eight success factors for IISD. We included measures on staff education and experience; staff involvement in external and internal networks and communities of practice; new idea generation; level of efficiency in project delivery; and number of publications and expert presentations.

Progress

This first measurements of human capital provided a starting point for discussion and a baseline for analysis in future years, as we could not locate any benchmarks against which to measure our performance. Even at this initial stage, though, they proved to be useful for strategic planning because they are directly linked to factors necessary for IISD’s success.