What is human capital management? We explain the reasons and background behind its popularity in an easy-to-understand way!

First, let us look at the basic concepts of human capital management.
Human capital management is a management philosophy that considers the people who work for a company to be important "capital" and aims to maximize their value. It has the following two main characteristics.

1. Viewing human resources as valuable "capital" rather than "resource"
   In traditional management methods, human resources are considered a "resource," and the money spent on employee salaries and benefits is considered a "cost." In contrast, human capital management considers human resources to be "capital." Not only employee salaries, but also expenses such as education and training, skill improvement, and health management are all positioned as "investments" for improving the future value of the company.
2. Recognize employee capabilities and experience as "company value"
   In human capital management, the abilities and experiences of each employee are considered to be important assets of the company. These are valued as "invisible assets" and treated as the company's intangible assets.

Companies that have implemented human capital management are proactively pursuing measures such as human resource development, work style reform, and diversity promotion based on the above ideas. This is expected to lead to improved employee satisfaction and productivity, innovation, and even increased corporate value.

Why is human capital management attracting so much attention now? The following reasons are said to be behind this.

With the recent advances in digital transformation, many routine tasks have been automated. However, highly skilled and creative personnel are still essential for groundbreaking innovation and creative activities.

On the other hand, Japan is facing a serious labor shortage due to a shrinking labor force caused by a declining birthrate and aging population, as well as an increasing demand for personnel with specific skills.

As a result, improving employee skills and increasing the value of their human resources has become an urgent issue for companies.

Disclosure of information about human capital in securities reports has become mandatory for approximately 4,000 major companies from the fiscal year ending March 2023. This comes as investors and the market have begun to place more importance on non-financial information, especially information about human capital, in addition to financial information, when evaluating companies.

This mandatory disclosure has led to increased interest in companies' human capital management, including investment in human resources, development policies, and employee engagement (employee enthusiasm and attachment to the company and their work).

In recent years, "ESG investing" has become popular among investors. This is a method of selecting investment targets from three perspectives: "Environment," "Social," and "Governance."

Human capital management is deeply related to the "social" element, and human resource efforts are an important indicator in evaluating a company's social responsibility and sustainability. Therefore, promoting human capital management is an essential strategy for companies to raise funds from investors and increase their corporate value.

Human capital management began to attract attention in Japan after the Ministry of Economy, Trade and Industry published the "Human Resources Ito Report" in September 2020.

This is a report by the "Study Group on Sustainable Corporate Value Improvement and Human Capital," and it is the very foundation of human capital management, pointing out the human resource strategies that companies need to sustainably increase their value. Furthermore, in May 2022, a revised version, the "Human Resources Ito Report 2.0," was published, which delves deeper into the content and further emphasizes the importance of human capital management, including the addition of a "collection of practical examples."

With the release of the "Human Resources Ito Report" and "Human Resources Ito Report 2.0," human capital management has attracted even more attention, and many companies are accelerating their efforts.

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2025年9月30日までの期間限定で、「人材版伊藤レポート」の座長を務めた伊藤邦雄氏によるセミナーのアーカイブ動画を公開中です！

企業で働く「ひと」を大切な資本として考え、その価値を最大限高めていくことへの理解がぐっと深まる本セミナーを、この機会にぜひご視聴ください。

There are various benefits that companies can obtain by engaging in human capital management. The main Advantage are introduced below.

[Advantage engaging in human capital management]

As you can see, human capital management has many Advantage. However, it takes a considerable amount of time and money to see results, so it is important to take a long-term perspective.

From here, we will look at specific ways to put human capital management into practice. Below are some major examples of initiatives.

In human capital management, it is said that it is important to align the company's "big goals (business strategy)" with "how to develop human resources (human resource strategy)."

[Major initiatives]

• Clarify the company's future vision and outline the type of talent needed to achieve it
• Identify required skills and experience and clarify talent requirements
• Formulate a specific human resource development plan to achieve the goal

To facilitate smooth human capital management, we visualize the capabilities, experience, and skills of each employee, including who has what qualifications and what projects they have worked on.

This will enable you to assign the right people to the right positions, and will also help you promote the growth of individual employees and understand the skills map of the entire organization.

[Major initiatives]

• Create a skills matrix (a table of employee skill levels)
• Project experience database
• Qualification status management

We actively invest in improving the skills and capabilities of our employees. Human resource development can be said to be a core measure of human capital management.

[Major initiatives]

• Providing a variety of training programs (online courses, in-house study sessions, etc.)
• Introduction of a self-development support system (support for obtaining qualifications, subsidies for purchasing books, etc.)
• Establishment of a career consultation desk

In order to realize human capital management, it is also key to create an environment where employees can maximize their abilities. Currently, many companies that have introduced human capital management are taking the following measures as part of their "work style reforms."

The introduction of flexible working styles and the promotion of work-life balance can be said to be core measures for work style reform in human capital management.

[Major initiatives]

• Promoting telecommuting and working from home
• Introduction of flextime system
• Expansion of short-time work system
• Promoting paid leave
• Reducing overtime hours
• Enhancement of childcare and nursing care leave system

These initiatives will enable employees to choose a work style that suits their own lifestyle, making it easier to balance work and private life, which is expected to increase employee satisfaction. Furthermore, it is expected to reduce employee stress and increase productivity, ultimately contributing to improved business performance for the company as a whole.

A comfortable office environment is also an important factor in bringing out the creativity of employees.

[Major initiatives]

• Creating a space to relax
• Introduction of a hot desking system
• Creating shared spaces to encourage collaboration

A well-maintained office environment will bring out the creativity of your employees and make it easier for them to come up with new ideas. It will also stimulate communication between employees, which will lead to improved teamwork.

There are also various initiatives to improve business efficiency through the use of technology.

[Major initiatives]

• Cloud service adoption
• Use of communication tools
• Automation of business processes through AI and RPA (Robotic Process Automation)

The use of technology improves operational efficiency and allows employees to focus on higher-value added work. It also enables work styles that are not bound by location or time, contributing to the realization of flexible work styles.

There are several important points to successful human capital management.

First, a strong commitment from management is essential. By showing a proactive attitude from the top, the idea of human capital management will permeate the entire organization.

Secondly, since human capital management is related to the growth of each employee, it is essential to listen to their voices. Understand employees' needs and challenges through regular interviews and surveys, and reflect them in your policies. Also, ensuring transparency of information on human capital will increase the credibility of your efforts.

However, changing organizational culture is not an easy task for any company. It is said that it is important to introduce it gradually. Sharing successful examples of advanced initiatives and providing ongoing education and awareness-raising will make it easier to gain the understanding and cooperation of employees.

働き方やオフィスの改善によって、従業員がより働きやすく、能力を発揮しやすい環境を整えることができます。これらの取り組みは人的資本経営の成功にもつながり、企業の持続的な成長と競争力強化に寄与するのです。

Recently, we have seen a huge increase in enquiries from this perspective, such as "I want to rethink my working style and office."

そこでイトーキでは、人的資本経営におけるオフィス戦略について、具体的な効果と方法についてわかりやすく解説するガイドブックをご用意しています。その名も「人的資本経営時代のオフィス戦略ガイドブック」。
本書は、人的資本経営とは何か、オフィスでなにができるのか、どのような効果があがるのか、などをわかりやすい構成と読みやすいテキストでまとめています。

ぜひダウンロードいただき、人的資本経営の頼れるガイドとしてお役立てください。