Accumulation Accumulation of human capital is considered an important factor in strategic human resource management worldwide. However, majority of evidence is presented through the studies conducted in the West. This study has attempted to explore the impact of human

important factor in strategic human resource management worldwide. However, majority of evidence is presented through the studies conducted in the West. This study has attempted to explore the impact of human

Abstract

Accumulation of human capital is considered an important factor in strategic human resource management worldwide. However, majority of evidence is presented through the studies conducted in the West. This study has attempted to explore the impact of human capital on business performance in the financial sector of Pakistan. Data was collected from bank managers on structured questionnaires using simple random sampling technique. Results suggest that human capital has a positive relationship with business performance. Service innovation mediated the positive link. Furthermore, environmental dynamism and competitiveness moderated the link between human capital and business performance. Results are in line with resourced based theory which suggests that accumulation of human capital increases employee innovation that further results in increased performance. Results of this study are important for policy-makers in financial sector who need to improve human capital in order to enhance service innovation as well performance of banks. Limitations and future recommendations are also presented.