The strategic human capital has become a key factor of organizational innovation, organizational competitiveness and sustainable performance in the knowledge intensive economies. Companies are realizing that talent management, skill, and engagement of employees are the key aspects to build an innovation potential and sustainable value-generating. This paper examines strategic human capital in facilitating innovation and then narrows down on the mediating factors or talent retention and its contribution to the performance of an organization. The study utilizes a combination of the human capital theory, resource-based view and human strategic perspective relying on empirical results of the recent studies in various industries, such as manufacturing, banking, tourism, healthcare sector and technology-based investment sectors. The study will use a quantitative research design to look at the connections between strategic human capital practices, outcomes of innovation, retention of talents and organizational performance. Managerial and professional employees are surveyed with structured tool instruments and statistical methods like the structural equation modeling method are used to test the hypothesis. These results indicate that strategic human capital is a very important driver of innovation performance and the results of an organization, and talent retention is a very important mediating variable. The research is theoretically and practically relevant in that it indicates the strategic value of having competent workers so as to maintain the innovation and performance in the dynamic business world.