Combining Social Capital with Human Capital for Human Resources Management

Friday, 28. October 2016
Faisal Ghaffar, IBM, Ireland


The term “Human Capital” has long been used in the field of Human Resources Management (HRM) and traditionally it is defined as “the knowledge, skills, competencies and other attributes embodied in individuals that are relevant to economic activity” [1]. Within an organisation, human capital is the value that an employee brings to the organisation in the context of knowledge, skills and the experience. It includes the employee’s skills and knowledge gained through formal and informal learnings. Understanding human capital is important for HRM in order to outline its strategies for talent acquisition, training, and skills development amongst many other things. Human capital is even more important when it comes to employee learning and career development in the workplace. Organisations spend a considerable amount of resources in the training of their employees to increase the overall human capital of the organisation. The question arises whether the human capital the only capital that HRM in an organisation needs to invest in?

With the growth of enterprise social networking services, social dimensions of work are getting more attention within the organisations. Beyond the use of the tools of collaboration, these services provide many other indirect benefits as discussed in a previous blog post. One of the many benefits that can be achieved from social interactions at the workplace is to determine the “Social Capital” of each employee. Social capital is defined as ‘features of social organization such as networks, norms, and social trust that facilitate coordination and cooperation for mutual benefit’ [2]. Social capital locates the value in relationships among people and often this relational type of capital is missing in HRM. In HRM, where traditional human capital allows HR to understand employee’s skills and knowledge, social capital enables them to understand how some teams perform better than others, how successful employees progress their career, how information flows within organisations and who are the information brokers or blockers in the organisation. Social capital is as important as traditional human capital for HRM and combining both capitals can help HR better manage employee career progression, staffing around tasks and formation of teams.


Human and Social Capital


In DEVELOP, we aim to determine the social capital value for employees by analysing their workplace social relationships. By analysing enterprise social network data, we plan to focus on various factors such as identifying the communities an employee belongs to. We then determine the factors that keep an employee bonded within that community as a means of characterising the social capital for the employee. It is expected that social capital will help in determining personalized learning interventions for the employees to progress their career in the workplace. Moreover, social capital when combined with traditional human capital can benefit HRM in many different ways. For example, HR can use social capital to compare the performance of teams in the organisation. In multidisciplinary teams where human capital is balanced among different teams, social relationships (social capital) can be used to explain the high performing teams. Individuals in the high performing teams tend to have a strong bond amongst themselves. They are often better in accessing and applying the knowledge or expertise within the team in order to accomplish a task. In summary, human capital is crucial for HRM to understand in order to function properly but it is not enough to meet the challenges that businesses are facing these days in talent acquisition and skills development. Social capital combined with human capital is the key to solve today’s HRM challenges.



[1] OECD. Centre for Educational Research and Innovation (CERI). (1998). Human capital investment: An international comparison. OECD, Paris, France.

[2] Putnam, Robert D. 1995. “Bowling alone: America’s declining social capital.” Journal of Democracy 6: 65-78