Organisations are shifting away from their perspective that views people as a cost of doing business. Nowadays, they are choosing to see people as human capital. Such a perspective gives them a better chance of standing out from the competition and gaining an edge in the cutthroat market. 

High-quality individuals or workers offer value to the company. Study after study it has been found that an organisation's ability to create value is largely dependent on its ability to manage its human capital, which includes hiring, deploying and keeping employees in good positions. 

Human capital is the way education, training and other professional initiatives enhance the levels of knowledge, skill, abilities and social assets of an employee. The constantly changing business environment requires firms to strive for superior competitive advantages via dynamic business plans, which incorporate creativity and innovativeness. This is significant for long-term sustainability. 

Human capital is defined in the Oxford English Dictionary as "the skills the labour force possesses and is regarded as a resource or asset." Companies must effectively use their personnel as a tool for competitive advantage to differentiate themselves in the market. To increase value for the business, an organisation must develop plans with a key focus on labour productivity. 

There are some ways in which developing human capital can improve organisational effectiveness. Firstly, the organisation must understand elements of human capital such as skills, qualifications and education, work experience, communication skills, habits and personality traits, individual fame, brand image and competitive advantage. 

Secondly, the organisation has to understand its functions of human capital management. Some of these essential functions include job design and analysis, employee hiring and selection, employee training and development, compensation and benefits, employee performance management, employee engagement and communication, succession planning, employee retention, effective performance appraisal and feedback. Afterwards, the organisation has to go for the development of human capital by investing in current employees, utilising technology, aligning human resource development with corporate objectives, developing the talent pools and focusing on training and development. 

Through such practices, human capital development can impact organisational goals through value creation benefits from human capital, competitive advantage, enhanced organic growth, impact on finances and increased success in achieving goals. 

After interviewing some top-level professionals who are directly involved in such activities, it was found that all of them are looking for developing human capital to improve organisational effectiveness, usually in different ways such as constantly placing a strong emphasis on hiring human resources and looking for KSAOs — key success factors — that will enable them to accomplish objectives both in the present and the future. 

Thus, the development of human capital must be a priority for the organisation, and this intangible asset must be looked after. Businesses must keep in mind that if they invest in their employees' growth and care for them, they will in turn take care of their clients and increase revenue. Developing human capital is very much important in improving organisational effectiveness.

Md Mehedi Hasan Rubel is the AVP (HRM & Admin) at KCCL, BD Ltd.