Most of us have heard of the term “Human Capital”. And, for the most part, use of the term has received a bad rep. Viewing humans as commodities is a big NO NO! However, most people really don’t understand what Human Capital is.
WHAT IS HUMAN CAPITAL?
In layman’s terms, human capital is your combined Knowledge, Skills, Abilities, and Other characteristics (KSAOs) that give you value in the job marketplace. It is these combined KSAO’s that inform you of what to ask for when negotiating salary (we should all know our value), and what helps employers determine how much to offer. Truth be told, there are some employers who will try and low ball us which is why you should know how much you are worth.
YOU ARE A HOT COMMODITY!
Think of it in economic terms. Supply and Demand. The more unique the KSAOs the lower the supply. Most times when there is low supply of something great, there is going to be greater demand, and people will be willing to pay for it. If you are in high demand, you will be worth more, and you will be in a better position to ask for more!
WantedAnalytics.com in early 2015 published an article identifying the most high demand jobs with the lowest amount of available talent (Click Here). In most cases where there is a high demand and a low supply of talent, organizations will be willing to pay more to get you in the door.
So…What are they, and HOW YOU CAN LEVERAGE YOUR KSAOs TO GET AHEAD.
Knowledge- This is what you know. It can be what you’ve learned through education or from the experiences you have had in life or the workplace.
Skills-The ability to do something, and do something well. We acquire skills through various means. Some of us have more or better skills than others. Skills can be technical, artistic, cognitive, etc.
Abilities- possessing the means or skill to do something… e.g. you have the ability to build a social media platform because you have the technical skills and knowledge of coding, etc.
Other characteristics- this is what is unique about you…what makes you different, what makes YOU the best candidate for the job!
HOW CAN YOU LEVERAGE YOUR KSAOs?
Increase and diversify your knowledge. While formal education isn’t for everyone, there are other ways of increasing your knowledge. For example, you can learn a trade, or get certification, take a course or a class that will add value to your knowledge base. Hone your current skills and learn new ones. What do you do well? How can you do it better?
Another way to think of this is…
“Practice Makes Perfect”- Practice your skills so that you become the best. Take advantage of resources available to you that will give you the ability to do what you want to do. Identify what makes you unique and learn how to articulate it.
So let’s break it down.
Capital- Something that is used to generate wealth through investment.
If we invest in ourselves whether it is our Knowledge, Skills, Abilities or Other characteristics, we are bound to generate a return- Wealth!