Due to labour shortages and increasing labour cost, many hotels have employed foreign labour. However, some five-star hotels continue to employ the local workers. Although the employment of foreign labour helps to fill job vacancies, the over flooding of foreign labour is detrimental to Malaysia’s economy, social tranquillity, national peace and political stability. This paper reviews articles on foreign labours, human capital investment and compensation. Past studies found that a well-designed and implementation of job-skill training improves corporate profits and create shareholder’s value as increased human capital leads to customer satisfaction. Human capital refers to employee’s knowledge, experience, professional competency and cognitive ability. High investment in human capital is essential to service firms that provide customize service and seek to compete based on their services. To secure their investment, luxury hotels provide an effective compensation plan that includes internal and external equity.