![]() This contributes to the overall reputation of a company and has a big impact on its success.įor example, 69% of jobseekers said they would reject a job offer from a company that had a bad reputation.Īs you can imagine, it’s hard to translate intellectual capital into financial terms. Relational Capital: this includes the relationship a company has with its stakeholders such as employees, suppliers and investors. That’s because it includes the coding and programmes that bring you the wonderful learning management system (LMS) we all know and love. As a result, structural capital will be unique for each company.įor a SaaS business (like us!) structural capital is rather important. ![]() Structural Capital: this refers to intangible assets like business processes, data, company culture, values, media and programmes. ![]() Why does this matter? According to Oxford Economics and Unum, the cost of replacing just one employee is around $30,000 dollars. When your human capital resources are strong, you experience higher staff satisfaction and low turnover rates. It also includes their ability to create and think up new and innovative ideas for the company. Human Capital: this means an employee’s knowledge, experience, training and so on. There are three elements to intellectual capital. The Three Components of Intellectual Capital Imagine the impact if Google lost track of how their search algorithm works. Imagine how much KFC would suffer if they ‘forgot’ the 11 herbs and spices that make up their original recipe. If you were to take a big syringe and extract all the knowledge from all your employees you’d end up with a huge vat of intellectual capital (and a few traumatised employees!).Įxamples of intellectual capital include a secret formula, knowing the best way to execute a process, or how to structure a team effectively for maximum efficiency. It is the sum of employee expertise, organisational processes, and other intangibles that contribute to a company’s bottom line.” “…all informational resources a company has at its disposal that can be used to drive profits, gain new customers, create new products, or otherwise improve the business. Investopedia defines intellectual capital as: Intellectual capital is just like this, however instead of money, it’s the total of a company’s knowledge. This is all the money your company has access to and the valuation of everything it owns. Think about your company’s financial capital. We’ll also showcase how you can use learning technology to tap into its true power. In this article, we’ll give you a full breakdown. That’s why effective training campaigns and online learning programmes are so important.īut what is intellectual capital? Where does it live, how does it work and more importantly, how can you benefit from it? In fact, according to a recent research paper, financial capital fundamentally relies on intellectual capital.īy investing in your intellectual capital, you have the potential to create significant leaps in your organisation’s performance. After all, the quality of your intellectual capital determines the value of your company. This is the bread and butter of any organisation. But a vital resource is often overlooked - intellectual capital. ![]() Financial resources, labour, land and so on. A company has many resources at its disposal. ![]()
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