Human capital is the term for the collective capability, knowledge and skills of the people that are employed by an organisation. In an increasingly complex knowledge-based economy, the measurement of human capital provides a data-driven approach to identifying people management practices, which, if done well, can help ensure that value creation is long-term and sustainable.

This factsheet explores the challenges surrounding the measurement of human capital and the three clear levels of data collection and analysis for human capital data. It introduces the different types of reporting suited to various stakeholders, including external reporting, narrative reporting and internal reporting.

This factsheet was last updated by Edward Houghton.

Ed Houghton

Edward Houghton: Senior Research Adviser:Human Capital and Governance

Edward Houghton is the CIPD's Senior Research Adviser: Human Capital and Governance.  Since joining the institute in 2013 he has been responsible for leading the organisation's human capital research work stream exploring various aspects of human capital management, theory and practice; including the measurement and evaluation of the skills and knowledge of the workforce. He has a particular interest in the role of human capital in driving economic productivity, innovation and corporate social responsibility. Recent publications have included “A duty to care? Evidence of the importance of organisational culture to effective governance and leadership” for the Financial Reporting Council’s Culture Coalition, and “A new approach to line manager mental well-being training in banks” an independent evaluation of the Bank Workers Charity and Mind partnership to deliver mental health awareness training in the UK financial services sector. 

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