? Consulting Firm Korn Ferry study shows #human#capital 2X As valuable as physical capital
?1.00 invested in people adds ? 11.39 to GDP
✔ #leaders overvalue #tangible#assets
✔ #leaders undervalue #employees
✔ #invest in yourself and your people
Human Capital vs. Physical Assets: Unleashing the True Economic Power
Human capital is over twice as valuable as physical capital, with a potential value of $1.2 quadrillion, overshadowing the $521 trillion value of physical capital.
Every $1 invested in human resources adds a remarkable $11.39 to GDP, making it a highly lucrative investment.
The potential and appreciation of people as value generators set them apart from even the most advanced machines, as they can gain experience and knowledge over time.
In analyzing eight countries, the United States emerges with the highest human capital value, reaching an impressive $244 trillion.
The United States also showcases a remarkable human-to-physical ratio of 3.92, indicating the dominance of human capital in the nation’s economy.
Surprisingly, despite the substantial value of employees, many business leaders underestimate their worth and instead prioritize technology and tangible assets.
A survey of global business leaders reveals that 67% believe technology will create greater value in the future than human capital, and 63% predict technology as their firm’s greatest source of competitive advantage.
Alarmingly, 64% of respondents perceive people as a bottom-line cost rather than recognizing their potential as top-line value generators.
Misunderstanding and neglecting workforce performance measurement is prevalent, with 46% of business leaders admitting their organizations lack such understanding.
Furthermore, 40% of companies lack an executive responsible for tracking employee performance, hindering the realization of human resources’ full potential.
Shareholder pressure often leads companies to allocate investments towards tangible assets like technology, disregarding the significant value of their employees.
The study emphasizes that even in countries with economies focused on agriculture and industry, the value of human capital surpasses that of physical assets.
China, for instance, exhibits a human capital value of $110 trillion compared to $49 trillion for physical assets, resulting in a human-to-physical capital ratio of 2.23.
In conclusion, human capital is the powerhouse behind economic growth and value creation. Despite its unparalleled potential and contribution to GDP, it remains undervalued by many business leaders, who wrongly prioritize technology and tangible assets.
Recognizing and harnessing the full potential of human capital is essential for unlocking greater economic prosperity and success.
