Is there a difference between human capital and human resources?

The terms "human capital" and "human resources" often cause confusion. Some people, including experienced professionals, sometimes use them interchangeably even though they reference two different things.

Discover the difference between human capital and human resources, and learn about the professional functions and pathways uniquely associated with each subject.

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Key differences between human capital and human resources

Human capital describes the combined sum of the knowledge, abilities, and proficiencies people use as productive contributors to the global economy. In collective contexts, human capital essentially encompasses the entire lineup of hard and soft skills a specific labor force possesses.

Human resources (HR) specifically refers to the workforce available to a particular organization. It operates at both strategic and administrative levels. Employers use their HR departments to advance their short- and long-term business goals and to manage their recruitment, retention, compensation, and compliance programs.

In considering human capital vs. human resources, it helps to understand the related but differing objectives of the two fields.

Human capital management seeks to enhance the overall capabilities of an organization's workforce through targeted professional development and training programs. Meanwhile, HR management maintains a process-based administrative focus on the everyday functions and needs of employees.

Education requirements

You can pursue a specialized degree in human capital management as an undergraduate or a graduate student. Schools may offer these programs through their business or professional studies departments or as specialization tracks in HR-focused programs.

Alternatively, you can enter human capital management with an academic background in communication, education, industrial-organizational psychology, or other social science fields.

Academic programs in human resource management also operate at the undergraduate and graduate levels. Schools often align their curricula with established industry standards, such as those endorsed by the Society for Human Resource Management (SHRM).

At the graduate level, you can also study human resources in a specialized master of business administration (MBA) program. HR-focused MBA programs often take a strategic view that incorporates human capital perspectives.

Salary and earning potential

When comparing human capital and human resources, you'll also find that the two fields overlap in career paths. Academic programs in both fields train students to pursue similar careers, and degrees in either field transfer well to the other.

For instance, compare the human capital-aligned roles of training and development specialists and training managers with HR-focused human resources specialists and human resources managers.

Which specialty should I choose: human capital or human resources?

If you'd like a career path focused on helping people reach their full potential, a human capital specialization may make a good fit. While HR professionals also participate in workforce training and development, their job duties tend to focus more on organizational administration.

Conversely, HR might be a better overall match if you're interested in employee recruitment and retention and their impacts on organizational strategy.

Also, consider BLS job outlook projections for both human capital and human resources roles: