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3 tasks for finance to maximize the value of human capital

by Tom McGuire | Sep 14, 2015   ()

Imagine operating an industrial firm without the discipline of financially evaluating capital projects, without formalized cost accounting, without differentiating between spending that creates an expense from spending that creates an asset, without auditing internal controls or reported results. It seems unthinkable, yet that’s how most organizations are managing human capital investment today.

In today’s increasingly digital economy, investment in human capital will drive future market capitalization in most companies. However, HR staff does not traditionally have the skill set to achieve this need on its own, any more than manufacturing operations did in the past. To maximize value, human resources will require a different level of partnership with finance to enable focus on human needs that will differentiate between critical and noncritical roles in the organization.

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Source: Journal of Accountancy

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