"Human Resources" and "Human Capital"

Posted by HR Analytics on Monday, September 16, 2013
Are "Human Resources" and Human Capital" interchangeable?



In essence, not so, according to several sources like articles that can be retrieved in an Internet search.  These 2 concepts do sound almost the same and can easily be confused and used interchangeably but they are used very differently in many different ways.  HR, in general, refers to the function such as those performed in a typical HR office (e.g., pay, hiring, benefits, etc).  Human Capital typically refers to how the investments, not only in terms of financial investments, but also in terms of skills and knowledge that generate overall business productivity and value. 

The NGRAM query above of how these these terms have occurred in a corpus of books from 1908 to 2008 shows that there has been an increase in the discussion of these topics especially in the last decade or so.  
The increase for both concepts has been simultaneous with a slightly higher increase for the use of Human Capital in the last few years. With many businesses learning to become more lean, more agile, and more productive, Human Capital is a very important concept that must be recognized and understood. Knowing how investments made today in HR, in the knowledge and skills of the organization, are going to impact the other aspects of business operations today and in the future is critical.



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