Human capital describes the employee knowledge, skill sets, and motivations that provide economic value to a firm. It is important for a firm to engage in developing its employees' human capital to grow the firm. Improving employees' human capital will result in higher morale, increased productivity and a sense of belonging to a firm. Human capital is not static and can be improved through education. A firm can improve its employees' human capital through continuing education and on-site education.

A company could look to invest in educating employees by offering to pay some or all of their college tuition. Investing in employees' college education prepares them for work in more advanced positions within the company. For example, suppose an employee is working for the engineering division of a firm. The firm can increase its human capital by investing in a graduate business degree for the engineer.

A company can use on-site education such as workshops to increase its employees' human capital. Through on-site workshops, a firm can improve its employees' skill sets. For example, a company can create a workshop to teach its employees a programming language and data analysis. This equips the employees with a new skill set and helps to improve human capital.

Another way firms can improve their human capital is by offering seminars. These seminars provide employees with the opportunity to learn from experts who have similar work functions. This could lead to the exchange of ideas, tips and new techniques to increase the employees' overall efficiency.