Investing in Your Company’s Human Capital: Strategies to Avoid Spending Too Little—or Too Much

Chapter 7. What We Know from Macrolevel Research

The previous chapter focused on the value of human capital based on testimonials, anecdotal evidence, logic, intuition, and personal successes. This chapter takes the empirical approach and presents data that show the linkage between investing in human capital across organizations and subsequent payoffs. For years, the need to collect more evidence to show these payoffs has been an important issue confronting executives and managers.

The issue is not if a company should invest, but at what level. Most executives are convinced that some level of investment must be made, but where is the minimum level or where can the payoff be maximized? Researchers have been wrestling with this dilemma for many years. ...