HUMAN RESOURCE COSTS AND FINANCIAL PERFORMANCE OF QUOTED COMPANIES IN NIGERIA

Abstract

Accounting from the very beginning is confined to record only those business transactions which can be expressed in monetary terms. This study seeks to empirically investigate the relationship between human resource costs and financial performance of quoted companies in Nigeria. Panel data on different types of human resource costs and financial performance spanning from 2016-2017 were collected from financial reports and accounts of quoted companies on Nigeria stock exchange and federal Inland Revenue Service. Ordinary Least Square Multiple Regression, Auto Regressive Lag. Augmented Dickey-Fuller, Co-integration test, Granger Causality Test, Error Correction Model was used in analyzing the data with the aid of E-view version 12. The empirical results indicate that human resource cost significantly relate to financial performance, explaining about 80.1% of the total variation in revenue, human resource accounting were found to significantly relate to financial performance. The study conclude that human resource cost relate positively and significantly to financial performance and recommends that Management should not recruit more staff and should consider retaining only efficient staff, this implies that insurance firms should downsize their number of staff and focus on training and re-training of the most efficient members of staff. Management should make retirement benefits attractive so as to attract best brains to their respective firms, and there should be a well-coordinated program for staff development if the firm’s profitability and performance are desired to increase positively.