Why Invest In People

Why Invest in People

Invest in People, Invest in Success.   An Asset that Grows in Value With Use.

Intellectual capital refers to an organization’s knowledge, experience, relationships, process discoveries, innovations, market presence and community influence. It is the source of innovation and wealth production – it is the knowledge of value. Intellectual capital is divided into four types:

Human Capital
The Knowledge, Skills, and Attributes of employees.

Renewal Capital
The patents, copyrights, and marketable innovations including products, services, and technologies that a company creates.

Structural Capital
The formal systems that allow employees to communicate, solve problems and make decisions. It is the set of structures, routines, policies, procedures and information systems that stay behind when employees go home.

Relationship Capital
The organization’s relationship with suppliers, customers and competitors that influence how they do business. These relationships, especially if they are based on trust and integrity, are a source of competitive advantage.

The four types work in a cycle continuously increasing intellectual capital. As more investments are made in human capital, employees become more capable, engaged and committed to increasing renewal and structural capital, leading to more relationship capital, resulting in better financial performance. The money can then be reinvested to increase intellectual capital. (Saks, Haccoun)