This paper examines the role of human capital and organizational culture in promoting innovation in small and medium-sized companies in Bosnia and Herzegovina, with a specific focus on mentoring and informal education, career development, external communication with clients, and the formalization of internal processes. The aim is to determine which internal organizational factors most effectively stimulate innovative behavior in the context of a transition economy. The study applies a quantitative research design based on a structured questionnaire distributed to managers in 304 SMEs across different sectors. Data were analyzed using Pearson correlation, multiple and logistic regression, and comparative group tests, supported by visual data representations. The results reveal that mentoring, informal education, external client communication, and formalized procedures have a significant positive impact on innovation, whereas career paths and coaching do not exibit statistical significance. These findings highlight the importance of interpersonal knowledge transfer, customer-driven innovation, and structured processes in building an innovative organizational culture. Theoretical implications include the integration of human capital and organizational culture perspectives into SME innovation literature, while practical implications suggest that managers should invest in internal mentoring systems, informal learning opportunities, and simplified but clear internal procedures. The study is limited to SMEs operating in Bosnia and Herzegovina, with sectoral distribution potentially affecting generalizability. Data are based on self-reported perceptions, which may introduce bias. Future studies should expand to comparative regional analyses and include longitudinal data. This research contributes to the relatively scarce empirical evidence on innovation drivers in SMEs in transition economies, by integrating human capital and organizational culture perspectives. It offers actionable recommendations for managers and policymakers to enhance innovation capacity without relying solely on costly R&D investments.

Zadržavanje talenata predstavlja ključni aspekt talent menadžmenta, koji direktno utječe na konkurentnost i dugoročnu uspješnost organizacija. Istraživanje ove teme u regionu još uvijek nije dobilo na važnosti, pa ovaj rad ima svrhu da analizira i proširi dosadašnja naučna saznanja iz oblasti zadržavanja talenata. Cilj rada je istražiti važnost aktivnosti zadržavanja talenata kroz analizu i sistematizaciju postojećih teorijskih i istraživačkih saznanja, te ispitati nivo primjene ovih aktivnosti u uslužnim preduzećima u Bosni i Hercegovini. Također, rad nastoji identificirati specifične inicijative i programe zadržavanja talenata koje preduzeća provode, kao i izazove s kojima se suočavaju. Rezultati empirijskog istraživanja u okviru rada pokazuju da su aktivnosti zadržavanja talenata u prosjeku visoko razvijene, pri čemu se najveći fokus stavlja na kontinuirane programe motivacije, atraktivne nagrade i brigu o brendu poslodavca. Rad doprinosi razumijevanju važnosti zadržavanja talenata, daje saznanja o trenutnoj razvijenosti aktivnosti i pruža smjernice za unaprjeđenje organizacijskih praksi.

Talent management is an essential area within human resource management and has been increasingly receiving attention over the past several decades. The focus of talent management is on the most crucial employees within an enterprise. Therefore, it is vital to have a specialized and tailored management system for them to maximize business results. This paper addresses the connection between talent management and enterprise competitiveness. It aims to examine the relationship between these two variables within the business environment of Bosnia and Herzegovina. This paper significantly contributes to both theory and practice because it proposes a new, more comprehensive process model of talent management based on a detailed analysis and synthesis of all available scientific and research works. Following this, the paper tests the proposed model in practice and measures its success by examining enterprise competitiveness. The research was conducted on 101 service enterprises in Bosnia and Herzegovina in the second quarter of 2023. Managers of service enterprises involved in human resource management were surveyed. The questionnaire was formulated based on a combination of existing research in the specified fields. The data were subjected to correlation and regression analysis, and the research results were presented according to the previously set objectives and hypotheses. The research results showed that talent management is a significant predictor of competitive advantage. Additionally, a positive impact on competitiveness was confirmed for each individual group of talent management activities presented in the proposed process model.