Title: Human Capital Theory: Viewing Employees As Organizational Asset
Authors: Ebiasuode Awu, Ph.D, Blessing Darius, Ph.D , Mgbomo Philomina Chimele, Ph.D
Volume: 9
Issue: 3
Pages: 370-375
Publication Date: 2025/03/28
Abstract:
The study examines human capital theory in viewing employees as organizational assets. Human Capital Theory (HCT) has emerged as a foundational concept in economics and organizational studies, positioning individuals' skills, knowledge, and experiences as crucial assets for enhancing productivity and economic performance. This study explores the evolution of HCT, emphasizing the shift from viewing employees merely as cost centers to recognizing them as valuable organizational assets. Pioneered by economists such as Gary Becker and Theodore Schultz, HCT posits that investments in education, training, and employee well-being lead to increased productivity and profitability for organizations. Key dimensions of human capital, including educational attainment, skills and competencies, health and well-being, and social capital, are examined to highlight their interrelated roles in driving organizational effectiveness. Furthermore, the study discusses the implications of adopting a strategic approach to human resource management (HRM), which aligns workforce development with overarching business goals, fostering employee engagement and innovation. By illustrating the economic and social benefits of recognizing employees as assets, this study underscores the necessity for organizations to prioritize human capital investments. In doing so, organizations can better navigate the challenges of the modern labor market, enhance competitive advantage, and contribute to broader societal goals of economic growth and social equity.