The financial value of human capital and the challenge of retaining it

Abstract

Determining the value of companies based on human capital is a growing challenge in an economy increasingly based on knowledge and services. Such companies also depend on the contribution of key people to generate value, especially at certain phases of their development. Based on a case study of an engineering design firm (Firm), this article details a method that can be replicated to determine the value of other companies in the service sector. We also propose a financial method to support decisions on sharing that valueand how to do soamong the key people, to compensate them in line with the importance of their contributions. Finally, we point out the difficulties of this process and the variables that must be monitored by companies to reach their objectives of creating value and retaining talents.

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“…An interesting study developed by Dalbem et al (2014), has a different approach. Their research question was related to the value of human capital in the total valuation of the company.…”