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HUMAN RESOURCES ACCOUNTING ON THE PROFITABILITY OF QUOTED MANUFACTURING FIRMS IN NIGERIA

FAKIYESI Oyindamola Adesola, FALEYE Olubunmi Christianah, OLORUNFEMI Oladele Ebenezer, ADEYEMO Foluke Helen, ADEKANMBI John Ayodele

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Abstract

This study examined the effect of human resources accounting on the profitability of quoted manufacturing firms in Nigeria. Specifically, the study analyzed the effect of personnel cost, and staff strength on profitability of quoted manufacturing firms in Nigeria. The study captured 10 randomly selected manufacturing firms, over the period of 10 years spanning from 2011 to 2020. Data were collected from the annual reports of the selected firms. Collated data were analyzed using panel estimation techniques including pooled OLS, fixed estimation and random effect estimation. Result showed that personnel cost exert insignificant negative effect on profit after tax to the tune of -0.2746926 (p > 0.05), which indicated that profit after tax decrease by 0.27% whenever there is increase of about 1% in personnel cost. Secondly, result showed that staff strength exert significant positive effect on profit after tax, with estimate of 8.7533181 (p < 0.05) which shows that profit after tax increase significantly by 8.7% for every 1% increase in staff strength. The study concluded that resources accounting contribute substantially to the profit after tax of quoted firms in Nigeria. Therefore, this study recommended that manufacturing firms should ensure that personnel cost structure are designed in a way that motivate employees to do more in order to enhance their commitment and diligence for profitability maximization. Also, managers should ensure that people engaged as management and non-management employees are adequately assessed and examined, to ascertain that addition to employees is based on quality in order to facilitate profitability.

Keywords: Human Resources Accounting, Profitability, Manufacturing firms, Nigeria