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Companies can choose to invest in workforce development through on-the-job training, apprenticeships, seminars, or reimbursing workers for off-the-job training. The return on investment is a key factor in deciding whether to invest in human capital. Employers may expect workers to continue working for the company after training. Onboarding new hires is also considered a wise investment.
Various approaches in choosing human capital policies lean towards an employee or company paying for training or career development. Some companies invest heavily in workforce development, while others prefer to hire people who are already prepared for a particular position. On-the-job training may include an internship or apprenticeship or company-sponsored participation in special training events, such as seminars. Companies also differ in human capital policy on whether to reimburse a worker for the off-the-job training they undertake for career development. One of the main factors influencing a company’s decision to invest in human capital is the return on investment, since a company may not want to train a worker who will subsequently leave and take their skills to a competitor.
With the exception of publicly sponsored education, usually the employee, the employer or a combination of the two invest resources in human capital development. When a worker pays for training, in most cases he has the freedom to pursue individual career goals at will. Usually, the employer does not expect the employee to owe the company. If a company or organization is paying for training, the employer will likely expect the worker to reciprocate by agreeing to continue working for the company for a defined period. Employers increase investment in human capital through on-the-job training or by encouraging a worker to seek further educational opportunities on their own.
On-the-job training may involve on-site instruction from supervisors. Internships are often unpaid or low-paid contractual arrangements in which an employer offers an opportunity for an individual to receive training while gaining on-the-job experience. A company’s human capital policy may also be geared towards initiating an apprenticeship program in order to create a pool of trained workers within a particular geographic area. An example would be a group of boat manufacturing companies in a coastal area choosing to invest in a human capital policy for local training of boat builders.
Sometimes, developing an apprenticeship human capital policy is a political process, where a local government pays some of the costs to promote workforce development. Seminars conducted in the workplace or off-site are another human capital policy that invests in workforce development through short training sessions. Many companies adopt a human capital policy whereby onboarding new hires is considered a wise workforce investment.
Taking the time to orient a newly hired worker to a job usually increases the person’s chances of success in the position. Depending on the company, recruiting and losing a new hire quickly can be costly. In other cases, such as in industries using relatively unskilled labor, a firm’s human capital policy may be not to expend resources on training a workforce that may have a high turnover rate.
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