Human Capital Musings!

a peek into the human capital world…

Whats your “human-stock” value?


As human resource professionals, the constant question that lingers in many of our minds is – what is this value of people and people practices that we keep listening to, in any HR meet worth its salt.

You also have a ton of theory that advises the HR professional in each one of us to use HR and financial data of the organization vis a vis the best comparable players in the industry. The constant suggestion is to do this over a period of a few years, and see what kind of value the people at the top add to the organization.

It may sound complex – but in simple parlance, the import of such analysis will be felt with this analogy-

Suppose that the market capitalization, which is the sum public stock value of the company today, is USD10b for Imaginary Inc. Assuming that this evening a couple of your senior management folks decide to call it quits and join the competition, how much will the market stock take a beating tomorrow morning when the bell rings. If the mark-cap of Imaginary Inc will be beaten to USD 9b, then, clearly that is the kind of human capital value of the person or persons whom you risk losing in a whiff.

The same can be done not just for a person in the board or senior people, but even who is perceived as a crucial human capital asset across levels.

HR leaders will do well to devise what they think are appropriate metrics to value the people, in comparison with standard industry information. This can be stock market performance over a period of time, market share of similar players, the annuated growth rate of the top 5 in the space…. The choice of data is endless, and depends on the ease plus accuracy in using them for analysis.

Using such tools will not just enlighten the HR leaders on the value of their human capital, but will also make them contributors to any people decision in the board-rooms.

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