HRM contribution to country GDP growth

 Introduction 

Human resource management (HRM) plays a vital role in economic growth by improving productivity, innovation, and employee satisfaction. Effective HRM practices can lead to higher levels of employee engagement, motivation, and skills, which in turn contribute to increased output and economic growth.

Talent and performance management are linked to HR. HR wants to improve employee performance in order to influence business performance. It also wants to improve individual performance. The goal of talent management is to assign skilled applicants to managerial roles. assumed that managers with talent may have an effect on the success of the company. Because HRM seeks to influence firm performance, according to Wright & McMahan, (1992) paper in the Journal of Management. Human resources may also be the focus of capitalism's future phase. Because human capital may improve a company's performance, human resources are also its intellectual capital. indicated that by acquiring information (Peter, 2015).

                              Figure 1/Example of GDP growth

Human capital and economic growth

Human capital and economic growth have a strong correlation.

  • Human capital affects economic growth and can help to develop an economy by expanding the knowledge and skills of its people.
  • The level of economic growth driven by consumer spending and business investment determines the amount of skilled labor needed
  • Investing in workers has had a track record of creating better employment conditions in economies throughout the world.

The role of human resources in the economic landscape

  • Human resources play a crucial role in the economic landscape by managing the organization and country most valuable asset—its employees.
  • Effective HR management ensures the recruitment, retention, and development of a skilled workforce.
  • HR is responsible for aligning employee goals with organizational and nation objectives to drive productivity and profitability.
  • Through strategic workforce planning, HR professionals anticipate and address future skills needs to support the company and state growth and competitiveness.
  • HR also ensures compliance with labor laws and regulations, minimizing legal risks and maintaining a positive employer brand

                  Figure 2/Requirement of human capital management

HRM is responsible for developing the knowledge-based economy

HRM is essential for creating and promoting a knowledge-based economy within a country. By investing in employee training and development, HRM helps to develop a skilled and knowledgeable workforce that can drive innovation and economic growth.

There are three parts to the theory

First, a definition of "catching up" is provided, characterizing the phenomenon as a process of productive transformation that results in diversification into new products and higher-value added activities, technological advancement, the creation of better and more productive jobs, and changes in employment patterns.

The second part of the theory of productive transformation capacities. The notion posits that the ability to propel and oversee constructive transformations is represented in diverse group, mutual, or combined types of understanding at the business and workforce levels.

The third element of the theory of capacities for productive transformation is the idea of collaborative learning. The concept of capacities advances our knowledge of the relationship between economic growth and, on the one hand, education, training, and technological learning. A knowledge gap was identified in this connection.

Conclusion

The workforce needs to possess theoretical knowledge related to their field of work. Since tasks and professionals make up organizations, theoretical knowledge may improve employee task performance and organizational performance as a result. Furthermore, performance at work may have an effect on the GDP of the country. In order to do so, talent management becomes more crucial for business growth since productivity growth affects GDP in an economy.

References

Gurtan, U., 2017. Reseachgate. [Online]
Available at: https://www.researchgate.net/publication/315696725_Impact_of_Human_Resource_Management_on_Economy_Firm_Management_Perspective
[Accessed 30 March 2024].

Irmgard, N., 2014. Researchgate. [Online]
Available at: https://www.researchgate.net/publication/262855417_A_theory_of_capabilities_for_productive_transformation_learning_to_catch_up#pf8
[Accessed 30 March 2024].

Peter, D., 2015. Symbolizes that with knowledge workers.

Steven, N., 2023. Investopedia. [Online]
Available at: https://www.investopedia.com/contributors/53895/
[Accessed 30 March 2024].

Wright & McMahan, 1992. Paper in the journal of management.

 

Comments

  1. Milinda PereraApril 1, 2024 at 12:15 AM

    Strong Association with Economic Development Your acquaintance skillfully illustrates the relationship between human capital and economic growth, stressing the significance of investing in labor to boost output and improve working conditions. The legitimacy of the conversation is increased by the references to reliable sources that bolster this relationship.

    ReplyDelete
    Replies
    1. KUMARA WELEGEApril 12, 2024 at 5:34 AM

      Thank you for sharing valuable feedback.

      Delete
    2. KUMARA WELEGEApril 12, 2024 at 5:41 AM

      Thank you Very much for your valuable feedback.

      Delete
  2. Krishanthiny KrishnarajApril 1, 2024 at 5:13 AM

    It's interesting how you connect a country's GPD growth to HRM contribution!

    ReplyDelete
    Replies
    1. KUMARA WELEGEApril 12, 2024 at 5:35 AM

      Thank you Very much for your valuable feedback.

      Delete
    2. KUMARA WELEGEApril 12, 2024 at 5:41 AM

      Thank you Very much for your valuable feedback.

      Delete
  3. RangaApril 2, 2024 at 9:32 AM

    You have magnificcently explained how GDP growth and Human capital go hand in hand in todays economic circle.Good work.

    ReplyDelete
    Replies
    1. KUMARA WELEGEApril 12, 2024 at 5:35 AM

      Thank you Very much for your valuable feedback.

      Delete
    2. KUMARA WELEGEApril 12, 2024 at 5:41 AM

      Thank you Very much for your valuable feedback.

      Delete
  4. Tharuka LiyanaarachchiApril 6, 2024 at 6:01 AM

    This blog effectively underscores the critical role of HRM in driving economic growth through talent management, workforce development, and strategic planning. It provides valuable insights into how effective HR practices contribute to increased productivity and innovation, ultimately impacting the country's GDP positively. Overall, it highlights the importance of investing in human capital for sustainable economic development.

    ReplyDelete
  5. Sakvithi SenadeeraApril 11, 2024 at 11:22 AM

    Gain knowledge, good job.
    in addition, Human Resource Management (HRM) significantly contributes to a country's GDP growth by optimizing workforce productivity, fostering innovation, and enhancing organizational efficiency. Effective HRM practices align talent management with strategic goals, driving economic development and sustainable growth.

    ReplyDelete
  6. Sachini HithakshikaApril 15, 2024 at 2:07 AM

    By maximizing productivity among employees, encouraging innovation, drawing in investment, and aiding in talent development, HRM eventually promotes economic prosperity and adds to a nation's GDP growth. article nicely explain HRM contribution to country GDP growth.

    ReplyDelete
    Replies
    1. KUMARA WELEGEApril 15, 2024 at 9:19 AM

      Thank you Very much for your valuable feedback.

      Delete
    2. KUMARA WELEGEApril 15, 2024 at 9:20 AM

      Thank you Very much for your valuable feedback.

      Delete

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