Human Capital that is Intangible

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It is imperative and plausible that any organization, to look at its objectives, is then dependent on the value and quality of its intangible human capital as a component inextricably and indissolubly linked to the achievements of the fixed goals and goals and is thus a core and indispensable asset that a company is not able to undermine. By its definition, intangible human capital of an institution refers to the collective and cumulative abilities, skills, self-esteem, motivation, knowledge, creativity and competencies which are cardinally assimilated through extensive and exhaustive investment through training and development processes or programs, that are in its entirety meant to ultimately enhance the ability of an individual to smartly perform and accomplish a given task with the presumption of resulting in economic value to a given organization (Abeysekera & Guthrie, 2004).

Like any other resource, intangible human capital can be developed and managed to enhance the performance and productivity of a firm. The discussed below are some of the classic ways through which HR. can use to develop and grow intangible human capital to spur up organization growth (Currie & Almond, 2011).

Embrace training and development within the company. Education forms the major bedrock of developing intangible human capital in a firm. Training is essential as it aims at imparting new skills and knowledge in employees. When the company's labor force is well trained, they are in a better position to enhance their productivity and performance as they possess what it takes to produce quality work. Moreover, training imparts new will skills in workers and thus opening up a way for quality products and services to be produced which forms the core of success for an organization. Training can either be on the job training or off job training program which includes workshops and seminars which are organized externally (Abeysekera & Guthrie, 2004)

Facilitate the creation of a creative and innovative workplace conditions or climate. HR. can also promote intangible human capital through the provision of creative and innovative climate within the workplace. When employees are given an all-inclusive and facilitative organization culture that is premised upon creativity and innovation, then their creativity levels are going to be high which may result in the discovery of new ways of solving the problems facing the organization like using of cost-effective methods in production to lower production costs or the improvement of products quality and frequent improvement of products and services which is likely to keep the company competitive in the market (Rauch, Frese & Utsch, 2005).

Lastly, since intangible human capital is considered to be touching on employees' self-esteem and their motivation, then the HR. should also ensure that employees are well motivated as this will make them be satisfied and feel senses of accomplishments and thus improving their abilities and performance as they will have the desire to perform even better. Well, motivated staffs are likely to be free in sharing their knowledge, abilities, and skills with other employees and this helps to share knowledge within the organization which forms one of the cardinal aspects of growth (Rauch et al., 2005).

Recapitulative, intangible human capital forms one of the basic and yet the threshold of any company's success. Therefore, there exists a need to develop it through training, creativity, and motivation.


Abeysekera, I., & Guthrie, J. (2004). Human capital reporting in a developing nation. The British

Accounting Review, 36(3), 251-268.

Currie, J., & Almond, D. (2011). Human capital development before age five. Handbook of labor

economics, 4, 1315-1486.

Rauch, A., Frese, M., & Utsch, A. (2005). Effects of human capital and long‐term human

resources development and utilization on employment growth of small‐scale businesses: a causal analysis. Entrepreneurship Theory and Practice, 29(6), 681-698.

October 12, 2022

Economics Business

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