HUMAN CAPITAL REPORTING: EVIDENCE FROM NIGERIA
This study was carried out with the aim of examining human capital reporting and the Nigerian companies. In order to actualize the objectives of the study, various literature and theoretical issues were discussed. The instrument used for the purpose of this research was gathered through primary and secondary sources. The primary source is through questionnaires, while the secondary source extracts from textbooks by different authors, journals and other publications. The mass of information generated from the questionnaires was summarized in form of table and analyzed using simple percentage. The researcher administered fifty (50) questionnaires to respondents comprising of management and non management staff of some selected staff, out of which forty (40) questionnaires were retrieved. For the purpose of presenting and analyzing responses to issues raised in the questionnaires, the returned questionnaires are taken to 100%. The data collected was analyzed using t-test statistical tool. The findings from the analysis revealed among other things that, human capital reporting improves the profitability and competitiveness of Nigeria companies; Nigeria companies involve in human capital reporting as well as Human capital reporting improves employees’ productivity. Recommendations were however made by the researcher.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
Background to the Study
Statement of the Research Problems
Objectives of the Study
Scope of the Study
Significance of the Study
Limitations of the Study
CHAPTER TWO: LITERATURE REVIEW
Market Implication of Human Capital Investment
Human Capital Investment: The Concept of Human Capital
Training And Education
The Impact of Human Capital Investment on Firm’s Profitability
Impact on Firm Long–Term Competitiveness
Relationship Between Market and Human Capital Investment
Intellectual Capital (IC) and Human Capital
CHAPTER THREE: RESEARCH METHODOLOGY
The Research Instrument
Method of Data Analysis
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
Analysis of Data
Test of Hypotheses
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
BACKGROUND TO THE STUDY
The recruitment of academically qualified employees is a necessary start for sustainable human capital development in all organizations. Human capacity has become a critical index of competition in the world of business to the extent that the development of such capacities through training has become top priority in designing the strategic plan of business organizations (Oforegbunam and Okorafor, 2010). The above assertion seems more important for firms in Nigeria and other developing nations as they brace up ever increasing challenges of advancement in technology, deregulation, and globalization.
In order to ensure that corporate firms in Nigeria grow, develop, and remain globally competitive, they must train and develop their human capital in line with changing trends in technology and market economics. It seems a common practice among corporate firms in Nigeria, to see training as a one-time activity, necessary only for new employees. This is a mistake given that on-the-job training, sponsorship to seminars and workshops, as well as participation in trade fairs and exhibitions for serving employees helps them adjust to rapidly changing job requirements and market conditions this also play out in history of corporate value and performance.
According to Teixeira (2002), human capital has long been acknowledged to be an important factor for the productivity of individuals and more recently has been increasingly identified as a factor influencing the competitiveness of firms and corporate performance. He added that, human capital is a widely used concept with complex and varying definitions that are often left rather vague. In certain contexts it might include only schooling (i.e., acquired formal education), whereas in other circumstances it can encompass a wider set of investments that potentially influence the well-being and productivity of people, firms, and nations.
Human resource academics and professionals together have identified training policies that are critical condition to improve employee's skills, firm performance, organizational survival and considered essential for a firm to remain competitive. Thus, the training and its impact on firm performance is an important topic in the fields of human resource management and industrial relations.
While the developed countries have made giant strides on human capital development, the developing world, like Nigeria, still drags its feet in attempts at developing its human capabilities. In this study, an attempt will be made to examine how the human capital development can impact on corporate performance.
In the transition to the information age, the human capital of organizations, such as competencies, processes and people have become the central sources of current and future wealth (Kaplan and Norton 1996; Petty and Guthrie 2000). Concurrently, businesses are beginning to embrace formalized approaches to manage and report human capital, with the ascribed benefits of doing so including business growth, improved financial performance, more effective strategic planning and enhanced productivity (Department of Industry, Science, and Resources, 2001).
Within the intellectual capital discipline, human capital has often been singled out as being of prime importance in organizational value creation (Fitz-enz, 2000; Bontis and Fitz-enz, 2002) and a significant influence as a source of innovation (Sveiby, 1997).
The fundamental objective of corporate reports is to communicate economic measurements of and information about the resources and performance of the reporting entity useful to those having reasonable rights to such information (UK Corporate Report 1975).
In more recent times the Accounting Standards Board published its Statement of Principles for Financial Reporting (Dec 1999) and the concept of usefulness was a significant feature in this publication. As it is undeniable that human issues are useful for stakeholders to evaluate companies, they should be reported.
The accounting standards setting authority have published standards relating to the operating and financial review (OFR) of a company. As the profit and loss statement, balance sheet and cash flow statement are a historical account of a company’s performance, the OFR provides information that stakeholders can use to project the historical figures into the future. These usually include the company’s vision and strategy, but should also include information on human capital, and how it is being developed. After all, given the same physical assets, human capital and other intangibles are what makes a company perform better or worse.
STATEMENT OF THE RESEARCH PROBLEMS
Most managers would agree that human capital management has an impact on the company’s bottom line and that the human resource is the most valuable possession the company has. The phrase “our people are our best asset” has become a bit of a business cliché. According to research conducted by Kee Foong Richard Yorston (2003) among top FTSE companies as well as similar studies carried out in the U.S. and Europe, today’s managers go further by confirming that human measurement and reporting can lead to improve the profitability and competitiveness of the organization.
In the light of this, the following research questions are being raised.
Does human capital reporting influence corporate profitability?
Does human capital reporting influence corporate productivity?
Does human capital reporting influences employee productivity?
Does human capital reporting influence corporate turnover?
Why do company reporting human capital?
OBJECTIVES OF THE STUDY
The research objectives are:
To find out whether human capital reporting influences corporate profitability.
To verify whether human capital reporting influence corporate productivity.
To ascertain if human capital reporting influences employee productivity.
To verify whether capital reporting influence corporate turnover.
To examine why company report human capital?
The following hypotheses have been formulated to serve as a base for this research;
Ho: Human capital reporting does not improve the profitability and competitiveness of Nigeria companies
Hi: Human capital reporting improves the profitability and competitiveness of Nigeria companies
Ho: Nigeria companies do not involve in human capital reporting?
H1: Nigeria companies involve in human capital reporting?
Ho: Human capital reporting does not improve employees’ productivity.
H1: Human capital reporting improves employees’ productivity.
SCOPE OF THE STUDY
This research work is an empirical study on human capital reporting and Nigerian companies. The population of the study is Nigeria, while the sample is some selected public companies in Benin City, Edo State. This study will involve assessing corporate firm in the discharge of their human capital reporting.
SIGNIFICANCE OF THE STUDY
This study will be important and beneficial to stakeholders of corporate firms on the important of human capital reporting.
It will assist the government and regulatory agencies on the proper conduct of human capital reporting in Nigeria.
This study will help to restore the lost confidence of the public as regard the human capital reporting in Nigeria.
Both academic and other future researchers in this similar subject matter will find it a useful source of learning and research.
LIMITATIONS OF THE STUDY
In the course of conducting this research work, the researcher encountered some constraints. These constraints are:
Inadequate Study Materials: Research materials were of limited supply due to the practicality of the study. Where they were available; the cost involved in sourcing for them was very expensive.
Lack of Access to Current Data: Most managements and staff of the establishment would not want to disclose important or relevant information about their organizations on this subject matter, except were such is permitted by law to be disclosed.
Finance Cost: The cost involved in sourcing for the available materials and other necessary information was very high within the reach of the student researcher.
Kaplan, R. S. and Norton, D. P. (1996), "The Balanced Scorecard - Translating Strategy into Action", Harvard Business School Press, Boston.
Petty, R. & Guthrie, J., (2000), "Intellectual Capital Literature Review: Measurement, Reporting and Management", Journal of Intellectual Capital, vol.1, no. 2, pp.155-176.
Department of Industry, Science and Resources, (2001), Invisible Value: The case for measuring and reporting Intellectual Capital, Commonwealth Government, Canberra.
Sveiby, K. E. (1997), The New Organizational Wealth: Managing and Measuring Knowledge-based Assets, Berrett-Kohler, San Francisco, CA
UK Corporate Report (1975), Reporting on Human Capital; Objectives and Trends.
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