What is the Human Capital Net Worth of Your Business?

Where would Microsoft be without Bill Gates? Google without Larry Page? Or the Cleveland Cavaliers without LeBron James?

For some organizations, net worth is directly linked to specific individuals. This value is known as the human capital of the business. Investopedia defineshuman capital as “A measure of the economic value of an employee’s skill set . . . the education, experience and abilities of an employee that has economic value for employers and for the economy as a whole”.

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The Magic of Metrics: What Gets Measured, Gets Managed

Recently a group of local financial executives discussed the art of developing effective business performance measures. Participants agreed many key metrics used today are irrelevant in helping guide their business. Poorly chosen metrics waste corporate resources by diverting attention from important issues to less important or, worse yet, irrelevant ones. The group decided businesses should have a process in place to determine what metrics will be most effective. The following 6 step approach will help you create the best metrics for your business.

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