Human Capital Costs in the Context of Coronavirus Crisis

Slavka Šagátová

doi:10.1051/shsconf/20208301060

Abstract

Human capital is an important motor of business performance. In this context, the costs of human capital that the company spends in its efforts to ensure the development and achieve growth in its performance play an important role. However, in times of crisis and decline of production, labor costs that cannot be eliminated become unproductive. The sensitive area is especially area of the wage costs that the company has to pay to employees and thus they represent not only the loss for the company but also the cash outflow. The article maps the influence of this factor on individual branches of the Slovak economy. Using data on the volume of wages paid and estimates of scenarios for the possible development of the coronavirus crisis, it identifies the most vulnerable sectors in terms of unproductive labor costs.

Highlights

Human capital is an important part of the business economy, and investing in this area of production factors ensures the prosperity of the company
The crisis caused by the coronavirus pandemic has dampened the economy
The amount of labor costs is an important factor playing an important role in terms of the survival of vulnerable sectors, which burden their financial management and are a significant component of cash flow outflow

Summary

Introduction

Human capital is an important part of the business economy, and investing in this area of production factors ensures the prosperity of the company. With the reduction of corporate production due to the coronavirus crisis, the costs of human capital are becoming an item that reduces corporate profits. A significantly negative feature of these costs is the transformation of a large part of labor costs directly into losses, which further exacerbates the possibility of remediation of damages from the decline in production by enterprises. The high share of labor costs becomes a risk factor for the survival of companies. The inability of companies to pay wages can lead to the loss of employees in individual companies. This situation can lead to rising unemployment and, in this context, to further negative effects on the costs economy as a whole

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