Effects of human capital development on service quality, customer satisfaction, and overall business competitiveness: Evidence from South Africa

Abstract

The retail sector plays a crucial role in the global economy, and its competitiveness largely depends on the quality of services provided to customers. This paper aims to investigate the effects of human capital development practices on service quality, customer satisfaction, and overall business competitiveness in the retail industry. To achieve this objective, the study adopted a quantitative research design with an interpretive paradigm. A sample of 180 participants was randomly selected from the selected retail stores in the Eastern Cape, South Africa. The study employed a structured questionnaire to collect data on human capital development, service quality, customer satisfaction, and business competitiveness. The data analysis began with data cleansing and coding in Microsoft Excel, followed by SmartPLS. The findings of the study revealed that investments in human capital development, such as employee training, refresher workshops, and professional development, have a positive impact on the quality of services provided by retail organisations. Improved service quality, in turn, leads to higher levels of customer satisfaction, which is a key driver of customer loyalty and business competitiveness. Furthermore, the study revealed that the enhanced service quality and customer satisfaction resulting from human capital development contribute to the overall competitiveness of retail businesses. The study recommends that the retail industry invest in training and development initiatives, particularly soft skills. Implementing automated machines to improve service quality and high production requires a well-trained workforce.