HR staffing capacity, HRD expenditure and firm revenue: distinguishing persistent firm differences from annual change

Purpose This study aims to examine whether persistent between-firm differences and annual within-firm changes in human resource development (HRD) resources are differently associated with firm revenue. It tests whether this distal financial association is more consistent with accumulated organizational capacity than with a short-term input–output response. Design/methodology/approach Four waves of South Korean firm-level panel data from 2020 to 2023 were analysed. Linear mixed-effects models decomposed HR staffing capacity and HRD expenditure into between-firm means and within-firm deviations using 1,791 firm-year observations from 554 firms and directly tested differences between the corresponding between- and within-firm coefficients. Training hours were examined separately in 1,333 observations from 501 firms, and XGBoost was evaluated on a 2023 temporal hold-out. Findings Higher average HR staffing capacity and HRD expenditure were associated with higher revenue, whereas annual deviations were nonsignificant. For both indicators, the between-firm association was significantly stronger than the corresponding within-firm association. Managerial learning emphasis and training hours were nonsignificant. XGBoost achieved R2 = 0.702 and RMSE = 0.693, with HRD expenditure and HR staffing capacity the most important HRD-related predictors. Practical implications HRD should be evaluated as sustained organizational and financial capacity rather than through short-term budget changes or training volume alone. Originality/value The study advances HRD–performance research by showing that the HRD–revenue relationship lies primarily in persistent firm differences rather than annual changes.