Background: Competition in today’s markets has made organizations focus greatly on innovative workers and managers to meet up with dynamic market demands, which forms the bedrock of human capital theory as discussed by Crăciun (2015). As part of human capital theory, managers’ skills are the subject of this thesis in relation to innovation.

Objectives: To analyze the impact of hard and soft skills on manager’s innovativeness, thereby addressing a real problem facing organizations. This research therefore investigates how hard and soft skills of low-level managers’ impact their innovativeness by drawing inspiration from previous studies. The population for this study is limited to managers in engineering consultancy firms.

Methodology: Quantitative analysis is used for this research. Based on the research purpose and question, this study is explanatory. This study approaches theory development in a deductive way, such that hypotheses are proposed first and then data are collected to test the hypotheses. The model contains 3 constructs: Hard skills (HS), soft skills (SS) and managers’ innovativeness (MI). Each of these constructs contain variables that are operationalized in the questionnaire. Cronbach’s alpha and Exploratory Factor Analysis is used to check the reliability of each factor and validity of the constructs.

Results: Six models are analyzed with IBM SPSS Statistics 26. Quantitative tools such as Multiple regression and Spearman Rank Order Correlation was used for the analysis. The results show that there is significant and positive relationship between managers’ hard and soft skills and their innovativeness.

Conclusions: The empirical analysis shows that managers’ hard and soft skills are positively and significantly related to their innovativeness. This confirms the proposed hypothesis H1, H2 and H4 to be true. The result also shows that soft skills are more positively related to managers’ innovativeness than hard skills. The result of this thesis show that the more hard and soft skills managers have, the more innovative they will be. One of the implications of this study is that firms should ensure that their managers possess both hard and soft skills competencies.

Recommendations for future research: Further research on this subject should ensure that larger number of responses are collected. The inability to develop a model to test for hypothesis H3 was a challenge due to the existence of multicollinearity when forming the interaction variable between hard and soft skills. This will be an interesting area for further research. In addition, using other quantitative tools other than multiple linear regression may give more significant result.