Purpose – Pakistan adopted “one-size-fits-all” policy for human capital (HC) development with the
assumption that the level of HC is equal across industry and firm size. The purpose of this paper is to
test this major assumption on which this policy is based, by comparing the differences in the levels of
HC, overall and by dimensions of HC, by industry and firm size.
Design/methodology/approach – The study is based on new data set of a sample of 750
manufacturing SME firms in Pakistan, compiled through a survey. Applying the independent sample
t-test, one way analysis of variance and multivariate analysis of variance, the hypotheses of differences
in levels of overall and dimensions of HC were tested.
Findings – The results indicate significant differences in the levels of HC by industry and firm
size. The levels of HC were found to be higher in textiles, food, metal and leather industries, and for
medium-sized firms.
Practical implications – The findings provide supporting evidence on the inadequacy of the current
human capital development (HCD) policy in Pakistan. The study therefore recommends customized
HCD policies, accounting for differences across industry and firm size.
Originality/value – By taking the data on nine major dimensions of HC from 750 manufacturing sector
SMEs, the study tests the level of overall HC and its nine dimensions by industry and size. The study also
challenges the “one-size-fits-all” policy of the government of Pakistan for developing HC in SMEs