Final answer:
The ability of an organization to attract and maintain a skilled human resources pool is an indicator of the HR function's effectiveness and contributes to the organization's competitive advantage and productivity.
Step-by-step explanation:
The ability of an organization to compete with other organizations for a sufficient supply of human resources with the appropriate capabilities is an indicator of the HR function's effectiveness. An effective HR function not only ensures there is a suitable pool of candidates to meet the organization's needs but also aims to reduce any biases in the hiring process. This includes proactive strategies to attract diverse talent and create a workforce that is skilled, knowledgeable, and motivated, leading to increased organizational efficiency.
In a broader sense, investing in human capital—the skills and education of the workforce—yields significant returns. This includes higher productivity, higher earning potentials for employees, and a more robust contribution to the economy. As organizations improve upon their human capital, they are also more likely to provide competitive advantages and create opportunities for their workforce to thrive.