Human capital (HC) Development and SMES Performance: A Conceptual Review

This conceptual paper examines Human Capital Development (HCD) and its impact on SME performance in Nigeria. The literature on HCD strongly supports the existence of a causal relationship between HCD and SME performance. Organizations strive to hire individuals who can enhance operational efficiency and contribute to competitive advantage and organizational success, which can be achieved through HCD. HCD encompasses activities such as training, education, investments in classes, workshops, presentations, and work experience. The findings indicate that HC improves the efficiency and productivity of SMEs, it enhances SMEs competitive advantage, HCD support SMEs growth and sustainability and improves SMEs innovativeness capacity. Consequently, the study concludes that there is a positive and significant relationship between HCD and SMEs performance. Content analysis was conducted using documentation, seminars, and databases. The study recommends that SME owners and managers should invest more in HC and prioritize HCD by engaging employees in training programs, obtaining educational qualifications, and participating in workshops, seminars, and exhibitions. This approach is essential for building robust knowledge and work experience among employees, thus achieving higher levels of organizational performance.