2.1. Human Capital Management
Human capital is defined as the sum of the knowledge, skills, abilities, and experience of individuals that are inherent and acquired during life. In this way, human capital also defined: Bontis et al. [
22], Davenport and Prusak [
23], Armstrong [
24], and other economists.
In order to maintain or increase the value of HC, it is necessary to invest in it. The forms of investment are different. Basic forms are spending on education or training, health improvement, improvement of working conditions, safety at work, and ergonomics. However, ideas about human capital and the importance of investing in human capital, particularly in the form of education or training, have emerged in the beginnings of economic theory, in the works of Petty and Smith. More importantly, however, the subject of human capital was investigated by representatives of the Chicago School, especially Schultz [
25]. The Theory of Human Capital was developed by Becker [
26], who developed the theoretical basis for deciding on investing in human capital.
Opinions on the role and position of HC in a company and society are different. Kucharčíková [
27] made an analysis and created the structure of these approaches. Mankiw et al. [
28], Barro [
29], and Romer [
30] consider HC to be the source of economic growth. Edvinsson and Malone [
31], Davenport and Prusak [
23], and Armstrong [
24] understand HC as part of the intellectual capital, which together with the financial capital forms the market value of the enterprise. Svejby [
32] refers to HC as an intangible asset that, together with tangible net book value, forms the market value of an enterprise. Some HC components are the basic construction element for the area of efficient corporate governance. These are, for example, knowledge management, talent management, competence management, management of generations, age management, human capital management, and so on.
The HCM represents a relatively new concept of the people’s management in organizations. In the literature, various definitions for it can be found.
Kearns [
33] understands the HCM as development of the HC and human potential expressed via the enterprise’s value. According to him, the HCM is based on the generation of the enterprise’s value via people. He considers the HCM to be a strategic concept, which is focused on the organization as a whole.
The HCM concept should necessarily follow the enterprise’s strategy. This notion is supported by several authors and institutions. The European Public Policy Partnership [
34] describes the area of human capital as a significant determinant of the future success of each enterprise regarding the fact that its value rises over time, therefore, it is necessary to understand the importance of human capital and to perceive the people as a resource, rather than just a cost item. For this reason, human capital should be understood as a strategic, thought-out and logic approach within the management of people in the enterprise who individually or collectively contribute to the achievement of its objectives.
According to the Chartered Institute of Personnel and Development (CIPD), the HCM:
considers that people are more than the costs,
understands the measurement as important, which must point to a clear link between HC and business performance,
determines the mutual relationship between human resources management and business strategy,
emphasizes the importance of measurement, which points to the fact that the policy of human resources management together with the practice bring excellent results and also serve to determine the direction of human resources, and
underlines the role of a business partner within the framework of human resources practices, providing different types of advice: what to measure, how to measure it, and how to interpret the results [
35].
Donkin [
36] emphasizes the importance of HCM measurements. In addition, it is important within HCM to obtain and analyze the obtained results and to use them as a strategic and competitive benefit. Nalbantian [
37] also emphasizes the importance of measurement within the HCM.
The requirement of measurement was entrenched in the concept of the HCM also by Armstrong [
38], according to whom the HCM consists of the analyzing, measuring, and the subsequent assessing of how the selected strategy and the processes that were applied within the human resources management were successful in practice.
The Search Financial Applications [
39] understand the HCM as an approach to employees that perceives them as an asset whose current value can be measured and its future value can be increased via the investment. The enterprise that uses the HCM provides clearly defined and thoroughly communicated performance expectations for its employees.
According to Fitz-enz [
40], HCM should use HC information and identify the relationship of this HC information with an enterprise’s performance. For this reason, it is necessary to monitor and analyze only relevant information.
Archibald [
41] argues that, in an enterprise, there is the HCM in a narrower scale, which refers to the measurement and analysis of the metrics within the area of human resources, such as employees’ turnover, costs per employee, and the efficiency of the training and education.
The Management Study Guide [
42] states that the objective of the human capital management is to manage the employees of an enterprise in the way that they significantly contribute to its overall productivity. It is not only about the improvement of the employees’ existing abilities, but also about utilization of the best of them.
Ahluwalia [
43] seas the importance of the HCM in the fact that the planning within the HCM enables the organizations to form a stock of resources being prepared for the achievement of the strategic goals. This provides several advantages for the organizations, including e.g.:
more efficient use of resources,
the provision of realistic personnel projections for the purposes of budget making,
provision of a clear justification of the expenditures on the training a retraining, development, career counselling and hiring efforts,
the aid in the maintaining or strengthening of HC, and
the aid in the preparation of the forming and development of HC.
At present, if enterprises strive for being successful, it is a high time for them to move the item of human capital to the right side—the side of assets. The perception of human capital as an asset that can provide the profit in the future is the focal idea for the maintaining of competitiveness. To be able to increase their performance and competitiveness in the market it is required for the organizations to invest in human capital and to measure its effectiveness in two aspects (the effectiveness of the utilization of HC and the effectiveness of investment in HC) within the implementation of HCM (
Figure 1).
The afore-mentioned statements imply that the HCM concept is a process of the people’s management that follows the business strategy, while it considers the employees to be the assets (or the wealth). The main point is the efficient management of human capital via the measurement, analysis, evaluation and reporting of the data on the amount of HC, effectiveness of its utilization, and the effectiveness of investment in HC.
Experts have suggested different approaches to quantifying the value and effectiveness of using HC. For example, Wyat [
44] proposed the Human Capital Index, Mayo [
45] proposed a Human Capital Monitor, and Fitz-enz [
40] published Human Capital Cost Factor, Human Economic Value Added, or Human Capital Market Value. Andriessen [
46] suggested the Human Capital Effectiveness. Mathis and Jackson [
47] proposed the Human Capital Value Added.
It is important to interconnect HCM with the key performance indicators of the enterprise and to identify the key HC components for them. After performing and evaluating the measurements that are needed and after the benchmarking, it is needed to identify the shortcomings in the area of HCM and to take corrective measures and evaluate them as well.
In this article, we will focus only on the area of evaluation of the effectiveness of HC investment. In the literature, there are several metrics for the calculation of the effectiveness of investment in human capital. Some of them are based on the common methods of the investment appraisal, for example, the Return of Investment (ROI), the Payback Period (PP), or the Net Present Value (NPV), which are more suitable for one-time or short-term investment in HC. The HC investment has three important forms. There are investment in training, healthcare, safety and health protection, and the improvement of the work environment and ergonomics. For example, the field of health care is studied by Chui et al. [
48]. The most often, the HC investment refers to the investment in training. This was corroborated by the results of our survey, too. For these purposes, there is, for example, the HC Return of Investment (HC ROI) according to the approaches of various authors, for example for example Mankiw et al. [
28], Fitz-enz [
40], Manuti et al. [
49], or the Training investment value (TIV) by Evans [
50] (
Table 1).
A disadvantage of the metrics listed is also that some of them in actual fact express the effectiveness of the HC utilization. The TIV expresses the costliness of the training activities per one employee, which again does not show how the training activities contributed to the enterprise’s outputs.
For a successful implementation of HCM in enterprises, it is necessary for the managers of the human resources to create and assess the metrics reflecting the specific conditions and industry where a particular enterprise conducts business. The same applies for the enterprises while using e-business.
2.2. Investment in Human Capital in Enterprises within the Area of E-Business
In the literature, there are many studies and research results described, pointing out the great importance of HC and of the investment in the increase of its value (the increasing of individual HC components), especially via the training in the field of information technology (IT) for the enterprises within the area of e-business.
Ilin et al. [
51] in their studying of e-business used the data gained from 276 enterprises from five developing countries of the Western Balkan. The authors used the definition of e-business as the “conducting transactions along a value chain”. This means that it includes the purchasing from suppliers as well as the selling of products and services to customers. However, all these parts use the connection of an internet platform with the IT infrastructure.
The TOE (technology-organization-environment) framework was applied here, using three aspects influencing the implementation of a technological innovation (e-business) were identified. The technological context represented the technology currently being used in an enterprise and the relevant technical skills of employees available. The organization context was characterized via internal specifics of an enterprise, such as its size. The context of environment represented the outer environment where an enterprise operates, thus the industry, competitors and business partners. Within this distinguishing, human capital is firstly included in the element of the technical skills of the employees needed.
In connection with these technical skills, for instance, the results of the research conducted by Oliveira and Martins [
52] strongly support the importance of training programs in the field of IT for the employees. On the other hand, the lack of knowledge pertaining to the information systems and information technology is often identified as the factor that slows down the development and implementation of new technology, such as the e-business [
53,
54].
Ilin et al. [
51] further state the importance of understanding the advantages of the new technology by employees and support from the managers. The support of top management can be perceived as another building block of the HC in an organization because it helps to create the commitment of employees and it cultivates the enterprise’s culture and climate. These components are the prerequisites for the success when implementing e-business. Valuable components of human capital, generating value for the enterprise, are represented by the appropriate attitudes of employees and desirable behaviors, in this case, connected with e-business. The authors summarized the results of the previous studies as well. These revealed that the support of top management is a strong positive factor for the adoption of individual domains of e-business, including not only e-commerce but also e-procurement and e-markets.
Within the whole sample, the perceived impact of the top management’s support was verified as a statistically significant factor influencing the implementation of electronic business in enterprises. The lack of knowledge in the field of IT and information systems (IS) perceived by enterprises’ representatives was a statistically insignificant predictor of e-business adoption. However, the relationship that was revealed was in a negative direction, as it was expected. Enterprises in the Western Balkan thus do not consider the requirements of IT knowledge as significant for the use of internet in business. This finding can mean that these enterprises perceive the current level of the IT knowledge and skills needed as sufficient among their employees. Or, it can mean that the importance of such knowledge and skills is being underestimated, which prevents these enterprises from achieving higher performance and stronger competitive position through a full-fledged implementation of the e-business solutions available.
Choi [
55] puts the e-business also into connection with the need to achieve ecologic (green) economic growth. According to him, to be able to overcome new and complex challenges of the environment and society, enterprises must harmonize their short-term objectives focused on profit with the long-term sustainable performance. The internet revolution could bring the green solutions that are needed for this. The author sees the e-business as an innovation supporting the sustainable development that is needed for the green growth. The author then emphasizes the need of multidimensionality and interdisciplinarity within the sustainable development. These characteristics emerge from the complexity of integrating economic growth and nature preservation. For the field of human capital, such description of the sustainable development and green economic growth focuses the attention to the fact that in practice it is needed to combine various and deep knowledge and experience from multiple fields. Therefore, the development of human capital in enterprises cannot be one-sided. It needs to encompass the part of acquiring new qualifications, new technical knowledge; but, it also needs the part of influencing the attitudes and values of employees so that they are in compliance with the effort and direction of the whole enterprise. In the specific case, these are the possibilities of using e-business in combination with the attitudes respecting the seriousness of the need to protect the environment.
The authors Bi et al. [
56] were dealing with the research of e-business having a sample of 310 Australian fast growing small and middle-sized enterprises (SMEs) from various industries. They used the structural equation modelling method. According to them, e-business value is influenced, among other factors, by IT resources. When e-business supports the business process, enterprises are able to achieve a superb performance. The individual partial concepts in the study were expressed while using seven-point scales.
For the needs of their research, the authors defined the e-business capability in the form of the ability of an enterprise to utilize this technology to conduct activities related to elements above and below the enterprise’s position in the value chain (thus including upstream as well as downstream).
The e-business capability was expressed via five dimensions. The first was the communication with customers, the second was orders receiving, the third was internal communication, the fourth was procurement, and the last one was the communication with partners.
According to authors, e-business brings advantages for SMEs at levels from the operational up to the strategic one. Among these advantages, they list broader and richer possibilities of accessing expertise, which then further develop the enterprises. From the human capital perspective, the implementation of e-business contributes to the increase of this capital’s value and to creation of new opportunities for development of its components.
Knowledge and skills in the field of IT were specified in the research as knowledge of programming, system development and analysis, and the ability to apply newly-emerging technology. If an enterprise has the employees with the skills and knowledge from the field of IT and IS, it is able to integrate its IT strategy with the business one and gain an effective system for the support of its activities. This is also a way how to gain an advantage in comparison with the competitors. The authors accentuate the importance of employees with the needed combination of technical skills and knowledge of e-business (as components of the human capital) for enhancing the success of the implementation of this kind of conducting business.
One of the hypotheses in the research was directly connected to human capital, studying the influence of expertise on the capability of e-business. Another connection to the human capital was described as the market orientation of enterprises. This was defined as a type of corporate culture which the most efficiently supports the behavior needed for the generation of a unique value for customers. This contributes to a higher performance of the enterprise. Behavior as a part of corporate culture is an important component of the specific human capital brought into the enterprise by its employees. Market-oriented employees are focused on the needs of customers, but they also identify, analyze, and take measures in relation to the competitors. Enterprises that scan their environment like this and that are able to adapt are more likely to become leaders in the industry. One of the hypotheses in the research was therefore focused on the influence of market orientation on the e-business capability.
The results corroborated that expertise in the field of IT has a positive impact on the e-business capability. In addition, the impact of the market orientation on the strengthening of e-business capability was confirmed. Both of the components that represented two differentiated aspects of human capital proved to positively influence the level at which SMEs can implement the concept and technology of e-business and what results this could bring them. Not only the IT infrastructure needed but also the expertise in the field of IT makes the application of e-business more efficient in the whole value chain. Market orientation, as a valuable form of corporate culture, is a prerequisite for adoption of such IT innovation and it enables the enterprises to seize the opportunities on the market.
Zhu et al. [
57] within the e-business issues paid closer attention to procurement, channel management, and customer service processes. These authors applied the structural equation modelling, too. They had the data representing opinions of representatives from 196 manufacturing enterprises in China at their disposal. The key concepts in their study were quantified using five-point Likert scales.
The authors decomposed e-business to technical components, relational components, and business components. To study the use of e-business in value creation, they used a framework consisting of three layers—the layer of business assets, the layer of process capabilities, and the layer of outcomes.
The e-business in this research was characterized mainly as information flows that exceed the boundaries of an enterprise via internet. These flows connect individual partners in the supply chain and support processes of procurement, channel management, and customer service.
The attention paid to people in this research was broadened beyond the boundaries of individual enterprises. It was represented by the relational component in the structure studied. The authors identified the need of strengthening the bonds among partners in the whole supply chain, which supports the implementation of e-business processes. This relational component includes the stimulation of engagement of partners, combination of resources, and capabilities of partners, and also the discouraging from opportunistic behavior. The business relationships need to be built on a mutual trust and commitment to a long-term cooperation. This lowers the uncertainty of partners and supports them in increasing the investment in necessary tangible and intangible resources, and also in new technology and operations bringing revenues only later in time.
The study confirmed the importance of not only technical abilities but also of abilities to manage the relationships for the development and improving of capabilities of e-business. The management of relationships was, according to results, an important component in the field of management of online channels and online service capabilities. The fact that the effect of relationship management on online procurement was not confirmed according to authors implies that this process is more routine, and its effective operation is sufficiently supported by the digital platform itself.
Bernal-Jurado et al. [
58] also studied the e-business in relation to human capital aspects. They focused on the producers of organic olive oil in Spain. Specifically, they studied whether the characteristics of the manager of an enterprise and the number of administrative workers that are available can positively influence, or hinder, the application of information-communication technology in the form of e-business. The final sample in this study consisted of 89 enterprises and the authors applied the Qualitative Comparative Analysis method. The aim was to reveal the causes making enterprises in the sector of organic products to implement e-business. The characteristics of the manager were represented by the age, education, knowledge of information-communication technology (ICT), and the perception of benefits of ICT for enterprise and marketing of products.
The hypotheses in this study corroborated that enterprises whose managers had higher education and broader knowledge of ICT were more likely to conduct their business transactions online. The authors also emphasized the need to have a sufficient number of workers for performing administrative tasks that are related to e-business. Then, they also point out that these employees need to be trained and they need to have topical knowledge of the technology advancements so that they can contribute to renewal of enterprises.
Analysis of published research and professional work has confirmed the need for investment in training and human capital development of workers in e-business enterprises, especially in IT knowledge and skills.