Human Capital Information Research Articles

The effect of corporate governance attributes on human capital disclosure in South Africa

The disclosure of human capital (HC) information in corporate reports continues to be at the centre of discussions in the executive boardroom. Currently, standard setters grapple with implementing uniform disclosure requirements for human capital disclosure (HCD) and as a result this information is scant, erratic, and inconsistently reported. Hence the ISO 30414 was introduced to breach this gap. The aim of the study is to critically examine how corporate governance attributes affect HCD. A quantitative based cross-sectional design was followed using a sample of top 100 companies listed on the Johannesburg Stock Exchange (JSE). The ISO 30414 HR reporting framework containing 48 metrics was utilised to construct an assessment instrument with a 7-point scale to assess the extent of HCD. Overall, board meeting attendance yielded positive statistically significant association with HC information disclosed on recruitment, retention rate, turnover rate, internal mobility rate, competency rate, employee value-added, absenteeism rate. The board of directors play a critical role in improving the disclosure of HC information in the integrated reports. The study provides first empirical evidence on the impact corporate governance attributes have on HCD using the ISO 30414 HR reporting framework.

An analysis of the effect of employee tenure on WACC

ABSTRACT No international accounting policy exists to mandate that firms must report employee/workforce-level human capital information on a structured basis. Thus, the link between employee/workforce human capital and firm risk is not demonstrated in the literature. South Korea is a rare instance where human capital information, such as employee tenure is disclosed on Annual Reports as a rule. Therefore, we invoke resource-based theory, a human resource policy assertion, and a business ethics/sustainability inference to show whether capital providers differentiate between firms that are able/unable to retain employees, thus adjusting WACC accordingly. Using OLS regression analysis, from 2011-2020, empirical results show that firms with the ability to retain employees enjoy economically significantly lower levels of WACC. The results infer that equity/debt providers associate workforce tenure and firm risk/returns expectations. Empirical results also show that capital providers are nuanced when impounding employment information into risk/return assessments, based on incrementally different associations for investment-grade/non-investment-grade firms. The study contributes to the literature by providing evidence that management should develop strategies to retain employees to enjoy economic advantages. Because structured employee/workforce human capital information is rare internationally, the study has important practical implications for legislators, management, employees and the public.

Prototype Of A Web-Based Human Capital Information System Using SCRUM Method

The Human Capital Information System (HCIS) is software that manages staff data, payroll, and other everyday duties in the Human Capital sector. The Human Resources Management System aims to increase performance and eliminate mistakes in business processes to aid operational operations in the human resources department, particularly in recruiting, personnel data management, wage calculations, and promotions. While the system construction pipeline follows an SCRUM strategy for pipeline planning, which includes storyboarding (product owner) based on features to be generated, a product backlog, sprints, daily SCRUM, and sprint reviews, we also utilize qualitative data collecting approaches. This IS is connected with employee attendance, the human resource management system may help gather data and information on employee attendance in an accurate and efficient manner, as well as speed up and reduce mistakes in computing employee wages.

The role of management accounting in human capital management: Lessons from the services sector

Purpose: The article examines the role of management accounting in managing human capital, a key intangible asset for services sectors. Considering new expectations regarding the role of management accountants and human resource professionals, the article explores the ability of the disciplines to collaborate in becoming more strategic.Design/methodology/approach: The article considers literature on the evolution of the two disciplines, including archetype views on the role of management accountants, and presents case study analysis of a German information technology firm and a Dutch bank. Semi-structured interviews were conducted with senior managers from both the companies.Findings/results: From the interviews, it appeared that management accountants play the role of business partner but stop short of acting as comprehensive integrator of human capital information. While both companies have innovated in measuring and valuing human capital, human resources and finance analytics teams tend to work on their own and accountants remain ad hoc advisors.Practical implications: Efforts to refine the business case and value human capital fail to fully mainstream, as collaboration across departments remain loose. Innovations in soft management controls leave an impression of loose coupling between subsystems rather than comprehensively planned and integrated soft management control systems.Originality/value: The study defines complementarity between two disciplines, both seeking to account for and manage intangible assets more effectively. It concludes with lessons for researchers and practitioners on the development action-to-value pathways, improving non-financial metrics and purposefully shaping soft control systems.

Disclosure of Social and Human Capital in the Report on Sustainable Development of Agricultural Enterprises

The study aims to acquaint the scientific and professional community with the Sustainability Reporting Platform, which is the basis for preparing the ESGI report (Sustainable Development and Investment Report). This article describes standardized forms and indicators for measuring, preparing and disclosing human and social capital information because this component of agricultural production is the most sensitive and uncontrolled during the period of martial law. The Sustainability Reporting Platform includes three components: ESGI report, webinars (videos, materials) and publications (scientific articles, presentations). The ESGI report consists of standardized reporting forms and survey questionnaires. Standardized forms enable comparisons of sustainability indicators among different economic entities that helps to adjust their business strategies and goals. The survey questionnaires provide each economic entity with the opportunity of in-depth self-assessment of sustainable practices and define their sustainability goals by 2030. One of the main provisions of the ESGI report is consideration of the size of an enterprise (micro, small, medium, large). In particular, regarding social and human capital, additional information is not required to be disclosed if all employees of an enterprise receive adequate salaries and are covered by social protection (sickness leave, social leave, disability benefits). For comprehensive measurement and presentation of social aspects of the enterprise's economic activity, the authors proposed 10 indicators: 1) material social risks and opportunities; 2) social risks and transition opportunities; 3) social risks of martial law; 4) diversity of human capital; 5) work-life balance; 6) employment dynamics; 7) adequate salary; 8) education and career development; 9) occupational health, safety and hygiene; 10) freedom of collective bargaining and social dialogue. Reference levels have been introduced for each indicator. The resulting matrices allow to convert the actual data into points and to draw the diagram that visualizes the measurement results. Webinars for agribusinesses interested in updates of the information about sustainability measurement and reporting represents a promising direction for further development of the Sustainability Reporting Platform. Another important direction is the improvement of the ESGI report by introducing more accurate indicative assessment levels based on the data received from the Platform users.

Assessing growth potential of careers with occupational mobility network and ensemble framework

The growth potential of a career reflects its future prospects and is an important consideration for individuals and organizations when career planning. There is still a lack of quantitative assessment tools for growth potential of careers. In this study, considering the key role of human capital in human resource management, as well as the excellent performance of complex network and machine learning in big data analysis and prediction, a career growth potential assessment model with human capital ensemble is proposed through human capital-based occupational mobility network and ensemble learning. First, an occupational mobility network is constructed based on online professional dataset to associate occupations with each other. Then, five dimensions of human capital measurements are designed to quantify human capital in terms of education, experience, social capital, occupational size, and concentration. These are then combined with the occupational mobility network to create a new network that depicts human capital flows among occupations. Finally, an ensemble framework for assessing career growth potential is constructed to integrate multidimensional human capital information in the network and obtain quantitative scores of growth potential. This study is the original attempt to adopt a data-driven idea and an intelligent approach to understand career growth potential. The experimental results show that it also makes a useful exploration for modeling human capital flows and intelligent assessment of career prospects.

Board leadership structure and human capital disclosure: Role of independent directors

This study investigates board characteristics, including board leadership structure, which explain the human capital disclosure (HCD) provided by companies. It uses a self-constructed disclosure index to quantify the level of human capital information using content analysis. Generalized method of moment is employed to estimate a dynamic model of the relationship between HCD and the characteristics of boards of directors. The results show that companies are adapting to the new European Union (EU) Regulation Directive 2014/95/EU by increasing their HCD. There has been a change in the topics disclosed by companies that signal a commitment to social responsibility toward their employees and stakeholders. The level of HCD is significantly associated with board leadership structure, and independent directors play a moderating role when a chief executive officer (CEO) duality exists. Additionally, factors such as gender diversity, board size, board activity, company size and age, and the EU Directive approved in 2014 are all associated with HCD. This study enriches the debate on the role of independent directors in HCD because they can exercise a moderating role when CEO duality is present.

Do rating agencies impound workforce human capital information into default risk assessments?

ABSTRACT No accounting policy exists to mandate that employee-level human capital (ELHC) must be included on Annual Reports. Because structured ELHC information is rare, the association between ELHC and credit ratings (risk) is not demonstrated in the extant literature. South Korea is a unique instance where ELHC information is included on Annual Reports as a rule. Using a sample of 9,273 Korean listed firm-year observations from 2011-2020, we demonstrate that employee tenure, a ELHC proxy, has a positive association with credit ratings. The results infer that credit rating agencies interpret that employee tenure improves a firm's potential to survive a business cycle. The study also demonstrates that continuous employment has a more positive effect on credit ratings for NonBig4 and smaller clients/firms, compared to Big4 and larger clients/firms. The study contributes to the literature by demonstrating that firms that retain employees are less likely to default, implying that if firms look after employees, there are economic advantages. From a policymaking perspective, the study demonstrates the information advantage of reporting non-financial ELHC information on Annual Reports, on a structured/numerical basis.

(Re)assessing Climate-Smart Agriculture practices for sustainable food systems outcomes in sub-Saharan Africa: The case of Bono East Region, Ghana

This research paper assesses the reality of Climate-Smart Agriculture (CSA) practices’ potential to promote the outcomes of sustainable food systems (SFS) within Ghana’s smallholding agriculture context. The study demonstrates that rural farmers generally perceive CSA’s contribution to ‘food and nutrition security’ and ‘economic performance’ as more important than CSA’s contribution to ‘social equity’ and ‘environmental stewardship’. From a narrow perspective, the study demonstrates that farmers perceive CSA’s potential to ‘prevent pest and disease outbreaks’ and ‘increase human capital information’ as the most important contribution of CSA to SFS outcomes. In contrast, CSA’s potential to promote environmental stewardship is perceived as the least important among Ghana’s rural farmers. This enormity of displacement of smallholders’ perceptions at large is motivated by demographic, socioeconomic and ecological factors. Moreso, the CSA for SFS outcomes narratives is driven by farmers’ self-apprise, social networks and other local information dissemination agents. Furthermore, research findings suggest farmers’ awareness of CSA practices and interventions is deficient owing to unmet training and information needs for approximately 82% of the CSA practices and interventions. This situation elucidates the dichotomy of CSA practices’ narratives as tools for attaining food, nutrition security and economic performance to the detriment of critical issues such as increasing awareness and building farmers’ capacity to engage with CSA practices while also managing socio-ecological trade-offs that emerge over time due to engagement with CSA. Critical (re)orientation is needed across the scale to drive CSA practices and interventions that confine climate adaptation and food production practices within safe planetary boundaries without undermining social, economic, food and nutrition security needs.

Effect of Integrated Reporting on Firm’s Value: The Nigeria Manufacturing Sector Experience

The main objective of this study was to investigate the effect of integrated reporting on firms’ value drawing samples from listed manufacturing firms in Nigeria between the periods of 2011-2020. In this study, human capital disclosure index, manufacturing capital disclosure index, and social and relationship capital disclosure index were the integrated reporting proxies adopted to evaluate the effect on value of Nigeria manufacturing firms. Firms’ value was measured in terms of Tobin Q, and year price index was adopted as the control variable. Ex post factor research design was used and the study made use of secondary data sourced from the sampled companies’ annual reports and Nigeria Exchange Group Fact book. Data for integrated reporting variables were derived using disclosure checklist developed in accordance with the integrated reporting framework disclosure guidelines. Purposive sampling technique was used to select 51 out of the 59 manufacturing companies listed on the Nigeria Exchange Group. In order to examine the cause-effect relationship between the dependent variable and independent variables as well as to test the formulated hypotheses, the researcher used a robust regression analysis. The results of the analysis showed that the disclosure of human capital information in the annual report of listed manufacturing firms in Nigeria significantly improves the firm’s value. Based on this findings, it was concluded that only the variable of human capital disclosure has significant effect on firms’ value. Finally, the study recommended that the management of manufacturing firms in Nigeria should capture all disclosure items concerning human capital in their financial statements as this tends to improve the value of the firm and increase shareholders’ wealth. It was also recommended that management should develop an inclusive organizational culture for disclosing non-financial information with long term value creating capacity as they can maximise the market value of the firm over the short, medium and long term horizon.

Training, Recruitment, and Outplacement as Endogenous Adverse Selection

This paper presents a model of a competitive labour market where workers vary in firm‐specific and general skills, and firms choose the kind of information to disclose. We show that provision of general training, recruitment, and outplacement are linked. Disclosing general human capital information on bad matches but revealing nothing about good matches (information disclosure that resembles outplacement support in professional service firms) leads to an efficient allocation of workers and creates adverse selection that enables workers to pay for general training. It also implies that wages of released workers can be higher than wages of those who are retained.

An analysis of the effect of temporary/permanent contracts on firm efficiency performance: evidence from South Korea

PurposeBecause no international accounting policy exists to mandate human capital (HC) information must be reported on financial reports, the association between workforce HC and firm performance/efficiency is not well-established. South Korea is a rare example with high HC reporting quality, as well as relatively high national productivity. On the other hand, in some developed countries (such as the UK), HC reporting quality and productivity is low. Moreover, there is an increasing propensity to offer employees non-standard contracts. Thus, because of a divergence in HC reporting quality internationally, the South Korean sample can provide valuable insights to countries with weak HC reporting quality about the association between contract quality and firm performance/efficiency.Design/methodology/approachUsing a sample of Korean listed firms (2010–2015), pooled Ordinary Least Squares (OLS) regression analysis is conducted to show whether firms that offer employees higher levels of permanent, relative to temporary contacts, demonstrate higher firm performance/efficiency.FindingsFirms that provide employees with increasing permanent (temporary) contracts experience higher (lower) performance/efficiency.Research limitations/implicationsThis research is limited due to sample selection. However, the sample represents the population of all firms that report contract type information in South Korea, a market with highly robust HC information reporting.Originality/valueBecause of data unavailability, a positive association firm-level performance/efficiency and permanent employment can only be made in a handful of countries. The study has policy implications and extends the non-financial reporting literature by addressing HC reporting limitations that exist in the mainstream accounting framework. Based on relative operational efficiency/performance, the study offers practical insights to management about the importance of staff retainment. Moreover, the authors also offer an anthropocentric perspective by inferring how low HC reporting quality can have a negative impact on society in Industry 4.0.

A STUDY ON HUMAN RESOURCE MANAGEMENT FUNCTIONS AND ITS EFFECTIVENESS

Human Resource Management System (HRMS) refers to an array of software including Human Capital Management (HCM) and Human Resource Information System (HRIS)that help HR staff take care of an organization’s most valuable assets, people. HR tasks are too complex and time-consuming when performed manually. Leveraging the help of a technological solution like an HRMS can help you save time, cut costs, and manage your staff better.Depending on your needs, you could opt for a simple HR Management Software with features that takes care of day-to-day administrative tasks like Employee Management, Leave Management, etc. Or you could choose a solution that addresses the strategic areas of human resource management like Training & Development, Performance Management, and Recruitment. Keywords: HRM Functions, HRM Effectiveness, HRM Relationships, HRM software.

Can Blended Finance Be a Game Changer in Sustainable Development? An Empirical Investigation of the “Lucas Paradox”

In recent years, the global development community has been emphasizing blended finance approaches for economic development without taking into consideration practical implications of the Lucas Paradox, or the observation that capital does not flow from rich to poor countries. To prevent misuse of official development funds as catalysts for private flows, it is crucial to consider the direction of blended finance approaches in light of the Lucas Paradox. To fill this important gap in the literature, this paper investigates determinants of capital flows in recipient countries where a blended finance strategy is applied in light of the Lucas Paradox, with a focus on foreign direct investment and portfolio equity investment. For the analysis, this paper utilizes a cross-sectional sample of 157 countries between 2002 and 2018, including ODA recipients and OECD DAC members, by conducting a regression analysis based on the ordinary least squares (OLS). Our findings suggest that the Lucas Paradox strongly exists in all recipient countries that can utilize ODA as a catalyst, which is the core of the blended finance strategy. Institutional quality, human capital and asymmetric information improvement appear to mitigate the Lucas Paradox, although the paradox does not disappear entirely. In addition, total ODA, institutional and human capital appear to be determinants of the paradox in the multiple regression model.

Determinants of Voluntary Human Capital Information Disclosure: Evidence from Deposit Money Banks in Nigeria

Determinants of Voluntary Human Capital Information Disclosure: Evidence from Deposit Money Banks in Nigeria

Global Value Chain Formation and Human Capital: Case of Korea and ASEAN

Purpose – This study discusses the effects of human capital in the formation of GVC linkages. We also investigate GVC intensity between Korea and ASEAN. Design/methodology – To solve the doubling-counting problem in evaluating comparative advantage, RCA has been re-computed using domestic value-added (henceforth RCA_VA) at the country-sector level instead of value of trade. The impact of human capital on GVC intensity was empirically analyzed by establishing a panel data set with four industries (ISIC Rev. 4) in eight ASEAN countries from 2005 to 2015 from OECD-TiVA and WDI. Findings – The empirical results show that human capital has a negative effect on GVC intensity in the agriculture and manufacture industries, while it has a positive effect in the service and information industries. The results do not mean that low human capital is a barrier and inefficient to GVC linkages. Low Value-added activities may be more profitable to some emerging countries. These findings suggest that it is important to accurately identify the competitive elements to increase gains from trade under the GVC. Also, it shows that comparative advantages can be misled by an RCA index evaluated in trade volume under the GVC. Originality/value – This study highlights the importance of human capital as a factor for the efficient formation of Global Value Chain (GVC). This study has different from the literature in analyzing the role of human capital in formation of linkage of the GVC. And we clarify the changing patterns of trade by removing the double-counting problem under the GVC.

Financial Performance, a Driver for Information Voluntary Disclosure: Insight from Manufacturing Companies in Nigeria

The prevailing issues surrounding voluntary disclosure is corporate failure, fraud perpetration, information asymmetry and inability to attract much investment. Companies with high financial performance tend to disclosure more information in their annual report by way of showcasing their superiority over less performing companies. In the light of the above, the study sought to ascertain the effect of financial performance on voluntary disclosure of quoted manufacturing companies in Nigeria as at 1st January, 2019. Expo facto research design was adopted and secondary data were extracted from the annual report of nineteen (19) manufacturing companies for a period of ten years (2008-2019). The analysis of the study was done using STATA software to run the descriptive and inferential statistics (multivariate regression analysis). The result depicted an insignificant effect between financial performance and market competition information voluntary disclosure (MCIVD), and also a significant effect between financial performance and human capital information voluntary disclosure (HCIVD). Return on asset showed a negative but significant effect, liquidity a negative but insignificant effect, and market capitalization a positive but insignificant effect on MCIVD. Whereas Return on asset showed a negative but significant effect, liquidity and market capitalization a positive but insignificant effect on HCIVD. The study recommends that management should boost their market capitalization to have more market competition information voluntary disclosure. Also, management should strive towards improving the LQ and MCAP of manufacturing companies in Nigeria. This in turn will help to meet up the need of employees in having more voluntary human capital information disclosure.

A comparative analysis of human capital information opaqueness in South Korea and the UK

PurposeHuman capital is considered by many to be a firm's most important asset. However, because no international human capital reporting framework exists, firms can decide to include/exclude human capital details on annual reports. Based on legitimacy theory, firms that disclose high levels of human capital information can be considered congruent with the expectations of society. However, firms can also choose to include human capital information on annual reports for symbolic purposes as an image management strategy.Design/methodology/approachUsing 2018 as a sample period, content analysis is used to evaluate the annual reports of the 25 largest British and 25 largest Korean firms to demonstrate the propensity of British/Korean firms to disclose human capital information as numerical and textual data.FindingsThe authors report that South Korean firms provide high levels of human capital information using narrative and numerical data, including value added human capital elements included on integrated reports. British firms on the other hand tend to use primarily positive narrative and limited numerical human capital data to present human capital information.Originality/valueThe results imply South Korean firms provide robust human capital information on annual reports as a legitimacy strategy. On the other hand, the UK's human capital reporting requirement can be considered as a form of image management. The results therefore have important policy implications for legislators, labour unions and firm stakeholders with incentives to enhance human capital information transparency.

스핀오프 스타트업 창업자의 사회적·인적 자본이 사업 성과에 미치는 영향 : 정형적 개념분석 활용

This study aims to identify the social and human capital of spin-off startup founders, and explores the relationship between capital and business performance. We propose a new method using formal concept analysis to address its relationships based on small-scale data, which incorporates the partially ordered capital evolution path with its business outcomes. For this research, we conducted in-depth case studies on spin-off startups from Samsung’s Creative Lab by collecting information from both sites - Linkedin for social and human capital information of founders, and KISLINE. for financial data of startup companies. The analysis revealed that the number of co-founders and industrial experience were positively related to the amount of funds raised by investors.

The financial consequences of human capital disclosure as part of integrated reporting

PurposeThe purpose of this paper is to analyse the financial consequences of the level of human capital (HC) information disclosed by firms through integrated reports. Specifically, this work examines the effect of HC information on the cost of capital and firm value.Design/methodology/approachA manual content analysis is used to measure the level of HC information contained in integrated reports. A fixed-effects regression model is used to analyse 375 observations (a balanced panel of 125 firms for the period 2017–2019) and test the financial consequences of HC disclosure.FindingsThe empirical outcomes indicate that HC disclosure has a significant and negative effect on the cost of capital and a positive impact on firm value. Our results show that companies can reduce investors' perceived firm risk by improving HC disclosure, leading to a lower cost of capital. Moreover, our findings support the notion that increased levels of HC disclosure are linked to firms' improved access to external financial resources, consequently enhancing firm value.Originality/valueThis study is the first contribution to examine the financial consequences of HC disclosure and is one of the first to examine the level of HC information within integrated reports.