HCM may appear to be a novel notion, but it dates back to 1696 when Sir William Petty recommended that the cost of human life be factored into everything from work to war. Similar concepts of investing in people may be found in the writings of Adam Smith, John Stuart Mill, Jean Baptiste Say, and other capital and labor economists throughout history. Schultz coined the term “human capital” in 1961, saying, “Consider all human qualities to be either natural or acquired.” Human capital will be one of the valuable attributes that can be improved by suitable investment.”
Today’s HCM is based on the principle of prioritizing people and talent management over administrative tasks performed by a traditional HR job.