Since they both relate to the current or potential human skills, talents, and talent that are crucial to the success of any business, human resources and human capital are notions that are obviously quite similar to one another. It is common to erroneously believe that the two concepts are the same and to misunderstand them. What is intended by human "resource" and what is meant by "human capital" varies somewhat but significantly.
Human capital refers to the skills, training, experience, education, knowledge, know-how, and competencies that are currently being contributed by humans to a business. In other words, human capital can be referred to as the value that is added onto a company by an employee, which can be measured by the employee’s skills and competencies. Human capital is an important factor of production, and employing individuals with the right education, experience, skills and training can improve efficiency, productivity and profitability. By giving their employees access to training and educational resources, businesses can invest in their human capital. Employee development and training can save the cost of employing extra workers with the requisite capabilities while also assisting employees in acquiring a wider range of skills and talents.
Understanding the definition of "resources" will make explaining human resources much simpler. Resources are collections of assets that can be used as needed until the collection is depleted. The pool of human talents, knowledge, and expertise that can be tapped into when needed is what human resources stand for. In other words, boosting efficiency, production, and profitability may be possible due to human potential, which has limitless capability.
Because they consider how existing and potential human skills might be employed to achieve the greatest efficiency and profitability, the phrases human capital and human resources are intimately related to one another. Human resources are the human potential that can be pulled from a large pool of resources, which is the primary distinction between human capital and human resources. The talents and abilities that have already been acquired and put to use are referred to as human capital. In order for human resources to be realized, they must be hired, educated, developed, and given opportunities and challenges. People capital, which consists of human skills, capabilities, and competencies that have been invested in and engaged in business operations while generating outcomes, can then be created over time from human resources.
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