Management and Human Capital Employment: An Overlooked Relationship

Abstract

In this article we look at data on management and skills demand of firms in existing databases and we highlight the strong positive relationship between both variables. We develop a model that explains this relationship and calibrate it in order to present quantitative results, which we then compare with our own estimates. We discover that a simple model with management as a technology can replicate well the estimated influence of management in the skills that firms require. We also present evidence of the influence of the sub-items of management on skill requirements and found that aside from the talent component of management, target and performance components greatly influence the demand for skills.