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Embedding human capital analysis in the investment process: A human resources challenge
Author(s) -
Royal Carol,
O'Donnell Loretta
Publication year - 2005
Publication title -
asia pacific journal of human resources
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.825
H-Index - 33
eISSN - 1744-7941
pISSN - 1038-4111
DOI - 10.1177/1038411105050308
Subject(s) - human capital , investment (military) , business , financial capital , human resources , work (physics) , human resource management , finance , qualitative analysis , process (computing) , quantitative analysis (chemistry) , accounting , knowledge management , qualitative research , economics , management , computer science , economic growth , sociology , political science , engineering , mechanical engineering , social science , politics , law , operating system , chemistry , chromatography
Human capital analysis has implications beyond the field of human resource management. It is also essential to the work of securities analysts. This paper addresses the proposition that securities analysts, their clients, and their industry can benefit from using human capital analysis alongside financial analysis for the purposes of making more transparent investment recommendations. While qualitative research into human capital is currently not being systematically adopted by securities analysts, it can illuminate the working of an organisation in a way that primary financial data on its own cannot achieve. When assessing which organisations are sustainable, a truly complementary approach requires both qualitative human capital analysis and traditional, financial, quantitative analysis. In essence, an integrated approach is needed for the purpose of making more transparent investment recommendations.