Relationship between Human Capital and Firm Performance

Abstract

At present the concept of human capital is gaining attention in this competitive and global environment. Human capital is able to enhance the efficiency and gaining sustainable competitive advantage. For accelerating the economic growth both developing and developed countries taking necessary initiatives and efforts for improving and developing human capital. Development of human capital is necessary for attaining the competitive edge and for survival in globalization era. This paper highlights the impact of human capital on firm performance. Human capital refers to the individual skills, knowledge and expertise of the workforce to perform a particular task. The literature based paper shows some evidence that there is positive influence of human capital is on the firm performance as well as human capital is also helpful in attaining the competitive edge via improved workforce. Human capital plays a significant role in improving the productivity and outcomes also generate creativity and innovation among the employees and organization.