The concept of human capital was developed in the 1960s and is founded on the idea that hard work, education, and skill development all lead to more work output. The term human capital is recognition that people in organisations and businesses are an important and essential asset that contributes to development and growth, in a similar way as physical assets such as machines and money. The collective attitudes, skills and abilities of people contribute to organisational performance and productivity. Any expenditure in training, development, health and support is an investment, not just an expense.
Often the problem with human capital development lies in the conversion of intellectual knowledge into the measure of the output an employee can achieve. This output can be used to make everyday tasks in the workplace an unconscious skill that increases productivity. Human capital development is also used to accelerate and grow staff into new positions and help the transitions into new positions through either coaching mentoring and/or shadowing.