Surely it is not correct to refer to employees as human capital as so many employers now do?

The term “human capital” has become popular in management and economics, but it’s also deeply contested.

⚖️ The idea behind “human capital”

The phrase comes from economic theory (notably Gary Becker, 1960s), where:

  • “Capital” means any resource that can generate value or returns.
  • “Human capital” means the knowledge, skills, and abilities that individuals bring to work — which can be “invested in” through education and training.

So in theory, it was meant to highlight the importance of people’s development — showing that employees are assets worth investing in, not just costs.

❌ The problem with the term

In everyday use by employers, “human capital” often slides into something quite different:

  • It objectifies people — treating them as resources to be optimized, like machinery or financial capital.
  • It reduces humanity to productivity — ignoring values such as dignity, autonomy, creativity, and relationships.
  • It frames employment as a transaction, not a partnership or social relationship.

Many ethicists, sociologists, and even HR professionals now argue it is dehumanising language, especially when used uncritically in corporate reports (“maximising human capital efficiency,” etc.).

🌍 Alternative perspectives

More thoughtful organisations are shifting language toward:

  • “Human beings,” “people,” or “employees” — direct and dignified.
  • “Human capability” — used by Amartya Sen and Martha Nussbaum to focus on what people can do and be, not just what they produce.
  • “Human potential” — emphasising growth and development rather than exploitation.
  • “Social capital” — highlighting networks and relationships rather than individuals as economic units.

🧭 In essence

Calling people “human capital” may sound modern or strategic, but it subtly reframes humans as inputs, not ends in themselves.
A more human-centred vocabulary — “our people,” “our colleagues,” “talent,” “contributors,” or “the team” — communicates respect for their intrinsic worth, not just their economic function.

Would you like me to summarise how this issue has been treated in labour law or ethics discussions (for instance, ILO and UN perspectives on human dignity in work)?

Here’s a concise but substantive overview of how labour law, the ILO, and broader ethics frameworks have treated the idea of “human capital” and why many reject or reinterpret it.

⚖️ 1. Labour law’s starting point: workers as rights-holders, not capital

Labour law — both nationally and internationally — is built on a corrective premise: that the employment relationship is inherently unequal, and workers need protection because they are not commodities.

  • ILO Constitution (1919) and the Declaration of Philadelphia (1944) both affirm that

“Labour is not a commodity.”
This principle remains one of the ILO’s four foundational precepts.

  • The idea directly rejects the treatment of people as capital inputs. Labour may be sold (in the sense of work done), but the person remains inviolable and cannot be reduced to an economic factor.
  • In legal frameworks (like South Africa’s Labour Relations Act or Basic Conditions of Employment Act), the employee’s status as a person with rights and dignity is fundamental — not a form of capital belonging to the employer.

🌍 2. ILO and UN: work as part of human dignity and capability

  • The ILO Declaration on Fundamental Principles and Rights at Work (1998) and the Centenary Declaration (2019) emphasise “human-centred work”, “decent work”, and “human dignity.”
  • The UN Universal Declaration of Human Rights (Article 23) calls work a right and a means of self-fulfilment, not a capital resource.
  • The UNDP Human Development Reports, influenced by Amartya Sen’s “capability approach,” stress human development rather than human capital accumulation.
    • The key distinction:
      • Human capital theory = people as means to economic ends.
      • Capability approach = people as ends in themselves — the economy exists to expand human freedom, not vice versa.

📚 3. Ethical and philosophical critiques

  • Catholic Social Teaching, from Rerum Novarum (1891) to Laudato Si’ (2015), insists that work must serve the person, not the market:

“Work is for man, not man for work.”

  • Modern business ethics (for example, the UN Global Compact and OECD Guidelines) urge a “human rights due diligence” approach — a framework incompatible with the notion of people as “capital assets.”
  • Even within management studies, critics like Henry Mintzberg and Mary Parker Follett argue that “human capital” flattens moral responsibility and erases the social dimension of work.

🇿🇦 4. South African context

South Africa’s Constitution embeds dignity at its core (s 10: “Everyone has inherent dignity and the right to have their dignity respected and protected”).
This carries through the labour framework:

  • Purpose clauses in the LRA and BCEA emphasise fairness, dignity, and equity.
  • The Employment Equity Act speaks of “equal opportunity and fair treatment”, never of “capital.”

When employers describe employees as “human capital,” it clashes subtly but clearly with this constitutional ethos of personhood — which sees workers as participants in social and economic life, not as economic property.

💬 5. Summary insight

Framework Core View of the Worker Position on “Human Capital”
ILO & Labour Law Rights-bearing person, not a commodity Explicitly rejects commodification
UN & Capability Approach Agent of freedom and self-development Reframes from “capital” to “capability”
Business Ethics Partner in value creation Warns against instrumental language
South African Constitution Human dignity as supreme value “Human capital” inconsistent with dignity principle

Would you like me to follow up with a short reference note or summary page (e.g. one-pager you can cite or include in reports or HR discussions) showing why the term “human capital” is inconsistent with human dignity and labour law principles?

Here’s a one-page reference summary you can cite or use in policy, HR, or legal discussions.
It distils the legal, ethical, and philosophical objections to calling employees “human capital.”

🧾 Reference Summary: Why “Human Capital” Is Inconsistent with Human Dignity and Labour Law Principles

  1. Foundational Principle

“Labour is not a commodity.” — ILO Constitution, 1919; Declaration of Philadelphia, 1944

This principle affirms that work involves human beings, not tradable capital. Employees cannot be equated with assets or resources to be owned, optimized, or depreciated.

  1. International Labour and Human Rights Frameworks
  • ILO Decent Work Agenda (1999) and Centenary Declaration (2019): promote human-centred growth, not capital-based metrics.
  • Universal Declaration of Human Rights, Art. 23: Work is a right and expression of dignity, not a form of capital.
  • UNDP Human Development Reports: Replace “human capital” with “human capability” — people as ends of development, not means to production.
  1. South African Legal and Constitutional Position
  • Constitution, s 10: “Everyone has inherent dignity and the right to have their dignity respected and protected.”
  • Labour Relations Act & Basic Conditions of Employment Act: Built to ensure fairness, equity, and dignity in the workplace.
  • Employment Equity Act: Centres equality and respect, not efficiency or capital optimisation.

Referring to people as “capital” subtly contradicts this constitutional ethos. Labour law views employment as a social relationship, not a purely economic transaction.

  1. Ethical and Philosophical Critique
Approach Core Idea Position on “Human Capital”
Capability Approach (Sen & Nussbaum) Development = expanding people’s freedoms “Human capability” preferred; rejects reduction to capital
Catholic Social Teaching “Work is for man, not man for work.” Treats person as end, not means
Business Ethics / UN Global Compact Human rights due diligence and social partnership Language of “capital” undermines responsibility and respect
  1. Recommended Alternatives

Use terms that affirm personhood and partnership rather than ownership:

  • “Our people” or “our colleagues”
  • “Human capability” or “human potential”
  • “Workforce” or “team members”
  • “Talent” or “contributors” (if contextually appropriate)
  1. Summary Insight

Referring to employees as “human capital” is conceptually inaccurate, legally discordant, and ethically reductive.
Labour law and human rights frameworks recognise workers not as economic assets but as persons with dignity, agency, and social value.

Would you like me to format this into a printable one-page PDF (for inclusion in HR or ethics documentation, with clean layout and citation footnotes)?

Here’s a concise companion guide to complement the “human capital” critique. It frames language around respect, dignity, and capability, rather than efficiency or ownership.

🧩 Companion Guide: Positive Ways to Speak About People at Work

  1. Principle: People as Ends, Not Means
  • Every term should acknowledge that employees are human beings with dignity, agency, and potential, not just instruments for productivity.
  • Avoid metaphors that reduce humans to “resources,” “inputs,” or “capital assets.”
  1. Recommended Vocabulary
Purpose Positive Terms Notes / Use Case
General reference to employees Our people, our colleagues, team members Inclusive, respectful, human-centred
Highlight skills & contribution Human capability, human potential, talent, contributors Emphasises growth, not ownership
Organisational context Workforce, staff community, project team Functional, non-objectifying
Leadership & development Capacity-building, professional growth, empowerment Focus on enabling people to succeed
  1. Framing Statements

Instead of:

“We need to maximise our human capital efficiency.”

Use:

  • “We aim to support our people’s development so they can contribute meaningfully.”
  • “Investing in team capability strengthens both the individual and the organisation.”
  • “We are committed to creating an environment where employees thrive and grow.”
  1. Ethical / Legal Alignment
  • Aligns with ILO principle: labour is not a commodity.
  • Aligns with South African Constitution: human dignity is inviolable.
  • Supports modern HR ethics: human rights due diligence, fair treatment, and inclusive culture.
  1. Quick Tip
  • Ask: Does this phrase treat the person as a human being or as an asset?
  • If it’s the latter, reframe using the table above.