Authors :
Ravi Kumar Neelayapalem
Volume/Issue :
Volume 11 - 2026, Issue 1 - January
Google Scholar :
https://tinyurl.com/xarj29st
Scribd :
https://tinyurl.com/3ueu67pa
DOI :
https://doi.org/10.38124/ijisrt/26jan745
Note : A published paper may take 4-5 working days from the publication date to appear in PlumX Metrics, Semantic Scholar, and ResearchGate.
Abstract :
Despite sustained investment in education, skills development, and workforce expansion, many organizations and
economies continue to experience stagnant productivity, declining engagement, and increasing execution risk. Traditional
accounting, governance, and policy systems treat human capital primarily as a cost or labor input rather than as an economic
asset subject to deterioration and misallocation. As a result, early-stage human capital impairment remains largely invisible
until financial or institutional failure occurs.
This paper proposes a conceptual Human Capital Audit Framework designed to identify capability deterioration before
it manifests in economic outcomes. Drawing on interdisciplinary insights from human capital theory, organizational
governance, labor economics, and emerging AI-era workforce dynamics, the framework identifies six recurring domains
where human capital degradation originates: education-to-deployment misalignment, skill–credential signal failure,
leadership judgment suppression, performance measurement distortion, AI substitution exposure, and measurement
blindness in macroeconomic and accounting indicators.
The paper reframes human capital as an auditable economic asset and introduces impairment logic analogous to
intangible asset testing. The proposed framework offers a structured early-warning mechanism for organizations,
regulators, and policymakers and establishes a foundation for future empirical research into human capital valuation and
governance.
Keywords :
Human Capital Audit, Human Capital Impairment, Workforce Governance, GDP Blindness, AI and Work.
References :
- G. S. Becker, Human Capital: A Theoretical and Empirical Analysis, University of Chicago Press, Chicago, 1964.
- Organisation for Economic Co-operation and Development (OECD), Skills and Productivity: The Role of Human Capital, OECD Publishing, Paris, 2019.
- World Economic Forum, The Future of Jobs Report, World Economic Forum, Geneva, 2020.
Despite sustained investment in education, skills development, and workforce expansion, many organizations and
economies continue to experience stagnant productivity, declining engagement, and increasing execution risk. Traditional
accounting, governance, and policy systems treat human capital primarily as a cost or labor input rather than as an economic
asset subject to deterioration and misallocation. As a result, early-stage human capital impairment remains largely invisible
until financial or institutional failure occurs.
This paper proposes a conceptual Human Capital Audit Framework designed to identify capability deterioration before
it manifests in economic outcomes. Drawing on interdisciplinary insights from human capital theory, organizational
governance, labor economics, and emerging AI-era workforce dynamics, the framework identifies six recurring domains
where human capital degradation originates: education-to-deployment misalignment, skill–credential signal failure,
leadership judgment suppression, performance measurement distortion, AI substitution exposure, and measurement
blindness in macroeconomic and accounting indicators.
The paper reframes human capital as an auditable economic asset and introduces impairment logic analogous to
intangible asset testing. The proposed framework offers a structured early-warning mechanism for organizations,
regulators, and policymakers and establishes a foundation for future empirical research into human capital valuation and
governance.
Keywords :
Human Capital Audit, Human Capital Impairment, Workforce Governance, GDP Blindness, AI and Work.
