Antecedents of Human Capital Erosion

Abstract

Organizations have been increasingly challenged to evaluate and adjust their human capital to changing business demands and to fill in the skills gap required to maintain productivity. In this review, we analyze how human capital may erode within an organization. We define human capital erosion as human capital diminishment over time related to an individual’s knowledge, skills and abilities deviation from the required, leading to a lower value generation at a workplace. We gather antecedents of human capital value diminishment by looking at interdisciplinary strategic human resource management, management, and economics literature, and aim to develop a human capital erosion framework which integrates human capital erosion antecedents. Our theorizing contributes to strategic human resource management research by revealing how human capital erosion occurs in an organization and leads to reconsidering the meaning of human capital in strategic human resource management literature by demonstrating the importance of health as a component of human capital.