Human Capital Measurement

This calculator provides some very basic measures related to the cost and effectiveness of human capital.  While these basic measures can be very useful in making some decisions, analyses that address the efficacy and cost of human capital should be customized to reflect a company's goals, strategy, business environment, actual and ideal performance, etc. 

The following list defines the measures that are calculated with this tool:

Revenue Factor: A basic measure of human capital effectiveness and is the aggregate result of all of the drivers of human capital management that influence employee behavior. It conceptually links the time and effort associated with the firm's human capital to its revenue output by indicating employee productivity.

Expense Factor: conceptually links the time and effort associated with the firm’s human capital to its operating expense output

Income Factor: conceptually links the time and effort associated with the firm’s human capital to its operating income output

Human Capital Value Added (HCVA): An adjusted operating profitability figure calculated by subtracting all expenses except for labor expenses from Revenue and dividing the adjusted profit figure by the total headcount.

Human Capital Return on Investment (HCROI): Calculates the return on investment on employees. This is equivalent to calculating the value added of investing in an organization's human assets. HCROI looks at the ROI in terms of profit for investments made on total labor cost by using the same adjusted profit figure of HCVA. HCROI is calculated by dividing the adjusted profit figure to human capital costs (except for training). It directly shows the amount of profit derived for every dollar invested in labor cost - that is, the leverage on labor cost.

Instructions:

1. In the Light Grey Boxes only, enter your information using only numbers (no commas, decimal points or other characters).
2. Click "Calculate" to compute the various Human Capital Measures.