Although the value of human capital is not captured on company balance sheets, it may account for about half of the gap between a company's market value and book value. Yet, many companies do not focus comparable scrutiny on human capital management as compared with other large assets, nor do they systematically measure its output (ie, productivity). Methods are emerging to enable employers to assess productivity losses, including absenteeism and presenteeism, and to understand the associated costs (ie, direct medical costs, total productivity loss). This will permit employers to assess the value of programs to enhance health and productivity. We contend that the effective workforce is probably decreased by 5% to 10% because of health problems. We believe that employers who increase their investments in healthy human capital now will emerge tomorrow as the companies leading the gains in US productivity.
When interviewed, chief executive officers (CEOs) of leading companies often are asked what makes their company so successful. Increasingly, the answer is our employees, or our people are our greatest asset. Indeed, changes in the US gross domestic product closely reflect growth in labor productivity, which is defined as a summary measure of plant and equipment per worker, improvements in the quality of the workforce, and improvements in technology and production processes. 1,2 National labor trends reflect our increasing reliance upon human innovation and a shift toward a more skilled workforce, of which a growing proportion engages in knowledge-based or team-based work tasks. For example, consider how information technology or quality management processes now are present in virtually all industries and job types.
Human capital is the term that encapsulates this people asset. But what is human capital, and what does it have to do with occupational health? This discussion reviews what we do and do not know about health and human capital and outlines critical next steps for the occupational health profession and for related health services research. Specifically, five questions must be addressed: 1) What is human capital? 2) What is the value of human capital relative to other company investments and how much of this is dependent upon employee health? 3) How well do various occupational health services and programs strengthen workforce health? 4) What metrics are needed to demonstrate the value of a healthy workforce and investments designed to bolster workforce health? 5) How can the occupational health profession provide the necessary leadership to guide companies in achieving optimal workforce health and enhanced workforce productivity?
Ultimately, we must answer the bottom-line question that would be posed by a CEO or chief financial officer (CFO): How much am I losing due to employee health problems? A corollary of this, and perhaps more relevant to current trends is, Do I lose anything if I spend less on employee health in comparison with the cost savings achieved from shifting more of the burden to employees?