MGMT458 U3 DB - Research Paper Example

MGMT458 U3 DB al affiliation MGMT458 U3 DB The retention of human capital is affected by the internal as well as the exterior factors. As seen in the research conducted by Baron (2007), external factors such as the political standing affects if the human resource will be retained or not. The political environment determines if the business will survive or not. The political environment determines if business will take place or not. If the conditions are adverse, most business pull out of the market so do the employees (Baron, 2007).

The economic changes also shape the human capital retention levels. Harsh economic shifts lead to collapse of numerous businesses; thus, loss of human capital. Tough competition also plays a huge role in human capital retention (Baron, 2007). If the company’s HR cannot devise programs and incentives that maintain their main employees, most likely they will be attracted to performing companies that require their skills. Internally, the compensation policy of a company will either attract or discourage the human capital (Baron, 2007).

If the compensation policy and structure do not favor the employees, they are likely to leave and look more benefits from another employer. The relations as designed by the HR department determine the retention of human capital (Baron, 2007). If the HR department is not keen on training their employees on proper relations among the staff, divisions will exist; thus, high levels of staff turnover. The HR department must also ensure that they allow for collective bargaining so as all employees are represented (Baron, 2007).

ReferenceBaron, A. (2007). Human Capital Management: Achieving Added Value through People. London: Kogan Page Publishers.