A Framework for Measuring Return on Investment (ROI) on People

Have you ever wondered what constitutes the market value of most companies? All of a company’s tangible assets, including the cash at hand, work-in-progress, land, buildings and hardware, comprise only a small part of its market value. In some companies—IT companies, for instance—tangible assets account for less than 5 per cent of the market value. At least 90 per cent to 95 per cent of the market value is difficult to measure and is often referred to as intellectual capital. In most cases, this may consist of a loyal customer base, stable organizational structures, knowledgeable top management, high level of professionalism, the company’s credibility, consistent results, ...

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