RELATIONSHIP BETWEEN STRATEGIES HUMAN CAPITAL AND ORGANIZATIONAL PERFORMANCE IN CONSTRUCTION MSMEs, MEDIATING EFFECT OF INNOVATION

The MSME sector in construction contributes significantly to employment generation and the economic development of countries. The strategies implemented by firms to meet their demand for qualified human capital in this sector ensure their competitiveness and strengthen their innovative activity. The objective of this study is to determine the relationship between the strategies employed by Ibero-American construction MSMEs to address human capital needs and organizational performance. Additionally, the mediating effect of innovation in this relationship is analyzed. A sample of 687 MSMEs was drawn from the 2024 FAEDPYME survey. Using Partial Least Squares Structural Equation Modeling (PLS-SEM), three constructs were analyzed: (1) Actions to address human capital needs (development, attraction, and retention of talent), (2) Innovative activity (products, processes, and management), and (3) Organizational performance. The results show that innovation in processes exerts a significant positive mediating effect between talent retention strategies and organizational performance indicators, with the coefficient of determination increasing from R² = 0.194 to R² = 0.329. Talent retention strategies in this sector should primarily focus on improving the work environment, enhancing the company’s reputation, improving working conditions, and designing career development plans. In conclusion, this study provides key information for managers of micro, small, and medium enterprises (MSMEs) in the construction sector to design more effective human capital management strategies, emphasizing better working conditions and greater employee initiative.