Why Is It Important To Invest In Human Capital?

In today’s day in age some organizations have to conduct business globally in order to succeed and gain the competitive advantage necessary to stay in business. To help that organization succeed an efficient and effective Human Resource program needs to be established and defined. Through the years, Human Resource’s roles and responsibilities towards an organization has shifted to where HR contributes vital input towards the analysis and development of organizational strategies. HR plays a vital role in employee recruitment and selection, human capital, identifying employee needs to match the needs of the organization and to continuously reevaluate their goals and to build organizational capabilities that meet the desired vision of the organization. Globally this can be a challenge, however, if HR understands the prospects and challenges associated with the country they are conducting business it can be a tremendous success. As a new member in the Scandinavian division …show more content…
On the contrary, when organizations fail to invest in human capital the workforce and the organizational environment can be affected negatively. Organizations need to realize that the employees that work for them are their biggest asset and the knowledge that they have cannot be replaced. HR has to develop and maintain a resource plan to establish or maintain a resource pool (Snell, & Bohlander, 2013, p. 216).
There are several factors that can affect human capital needs (to name a few) (Behara, 2005, p.2):
• Changes in demographic trends (aging Human Capital, shrinking talent, distracted and worried work force)
• Changes in business strategies like mergers, acquisitions and mergers
• Changes in the industry that affect workforce
• Changes in quality of the workplace
• Changes in job descriptions, roles and responsibilities
• Changes in supply and