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Management accounting is often concerned with questions of how to model human beings as capital assets. No matter how it is broken down or defined, human capital increases through education and experience and is vitally important for the success of organizations, cities and regions.
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When human capital is assessed by activity-based costing via time allocations, it becomes possible to assess human capital risk; it occurs when the organization operates below attainable operational excellence levels, such as errors and rework.
Risk accumulates in four major categories:
- Absence activities
- Collaborative activities
- Knowledge Activities
- Process activities (combination of collaborative and knowledge activities)
Four Keys to Managing Human Capital
Align with workplace goals and develop long-term strategies for acquiring,
developing, and retaining workers to meet these goals.
Employers are expected to offer tuition reimbursement for employees to get degrees,
which improves the quality of work. Employees are likely constrained by not leaving
their employers too soon.
Newcomers or new graduates are expected to learn specific workplace practices
through formal and informal training programs. Employers should identify the
specific training areas for performance improvement, monitor the effective and
efficient delivery of training, and assess the performance impact of the training.
Ongoing feedback helps employees and departments learn how they could best
contribute to their organization. The rewards for outstanding performance motivate
not only the individuals receiving recognition but also their peers who aspire to
receive similar recognition.
Our human capital management system software Spirals, helps organizations, especially those with multiple branches and in research and development, multiply knowledge and effectively manage human capital risk, such as the turnover of key employees.
Economists view firm-specific human
capital as risky since firm closure or industry decline leads
to skills that cannot be transferred (the evidence on the quantitative
importance of firm-specific capital is unresolved).
Based on our R&D and patented methods, Spirals help your organizations minimize
such risks by retaining the knowledge of key employees.
Take a look at the demonstration of Spirals, our tacit knowledge management system software
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