Making Human Capital a Source of Competitive Advantage for Educational Institutions

Traditionally, human capital has been considered as a necessary expense, rather than a source that contributes value to the organization.The value is associated with capital such as equipment, technology, and infrastructure. In recent years, numerous studies have demonstrated that spending in human capital development can be significantly valuable. Managerial decisions pertaining to hiring, reward and recognition, training and development, and evaluating employees' performance, etc are found to directly affect employees' motivation and improved performance, helping the firm to attain a competitive edge. In today's competitive business world, the knowledge, talents and skills that people in a firm possess have become increasingly important elements of intangible assets and potentially powerful source of competitive advantage. The purpose of this paper is to examine how an educational firm can invest in its human capital in order to make it a source of competitive advantage.