What Are the Different Methods of Developing Human Capital?

Article Details
  • Written By: Osmand Vitez
  • Edited By: PJP Schroeder
  • Last Modified Date: 12 January 2019
  • Copyright Protected:
    Conjecture Corporation
  • Print this Article

Human capital represents the individuals who provide labor for a business. These individuals work at all positions within a company, from the owners and executives to the frontline managers and hourly workers. Developing human capital means transforming the knowledge, skills, and abilities an individual currently has into items better suited for working in the business. Ways to accomplish this process include standardized training tasks, organizational changes, and career development options. Though many different methods exist for developing human capital, they often fall under one of these larger umbrellas.

Training is one of the most common human capital activities in a company. A new hire works with his or her manager or an experienced employee, learning the attributes necessary to complete the new job. Developing human capital through training can also occur at any time. For example, improving product quality may require changing how employees handle tasks. In short, training is an on-the-job process that moves an employee’s knowledge, skills, and abilities from one standard to a new standard, giving him or her new attributes and characteristics.


Organizational changes may be necessary when a company begins developing human capital. In some cases, a company may discover impractical policies or operations in place that restrict employee tasks. Altering these practices can help an employee improve his or her work standards. Other organizational changes may be adding technology into a business process or implanting a laissez-faire management style. Human capital development changes such as these help the employees complete more tasks than before or free them from micromanagement.

Career development is a classic tool in terms of developing human capital. An employee may join a company directly out of college and work his or her way to a top management position. The company grooms this worker for new tasks and positions as part of the job. In some cases, a company may simply have a job whose sole means is to develop an employee’s career. The workers who make the cut move up in the business, and those who do not leave for other jobs.

In many ways, there is now a single method for developing human capital. Each worker and individual is his or her own person with specific traits and characteristics. Some workers may take longer to develop, while others move more rapidly through the process. Upper management must discover each employee’s personal ability for growth. This allows the company to place developmental activities in place for more workers at one time.



Discuss this Article

Post your comments

Post Anonymously


forgot password?