Human Capital Valuation In Financial Forecasting: The Role Of Ai In Workforce Investment Decisions

Abstract

The present study explores how AI contributes to human capital valuation1 in enhancing financialforecasting2 andworkforce investment decisions3. Primary data was collected through a survey of HR professionals, Financial Analysts, andBusiness Managers in the month of February 2025. The survey focused on key factors such as employee experience, skills and competencies, performance metrics4, training and development investments, and employee retention potential and how much the use of AI actually propelling these factors. Using Analytic Network Process (ANP)5, the most influential parameters affecting workforce investment were identified. Further analysis through PCA6 and SEM7 revealed that AI-based models help align both HR strategies8 and financial decisions by predicting employee performance, future contributions, and return on workforce investment. The findings suggest that AI integration enhances the accuracy of financial forecasting, leading to more strategic and optimized workforce investments.