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The increasing effect of human resources costs on manufacturing success in Nigeria cannot be overemphasized. The reporting establishments on human resources costs are still at developing phase, where some of firms that have financed heavily in human resources in one way or another are not reported as assets on their financial statement, but rather recognized as an expense in the income statement. In lieu of this, the study examined the effect of human resource cost on financial performance of listed manufacturing firms in Nigeria. This study employed ex-post facto research design. 41 listed manufacturing firms were purposefully selected as the sample size of the study. Data were gathered from secondary sources using annual reports of the selected firms from 2011 to 2020. Data were analysed using descriptive statistics and regression analysis. The-analysis of coefficients reveals that Compensation Costs (CC) has a-negative (-8.91E-06) effect-on ROA which is statistically significant at 5% (p=0.0013). The influence of Retirement Benefit (RB) on ROA is also negative (-6.78E-08) and statistically insignificant at 5% (p=0.1143). Also, Employees Training Costs (ETC) has a-positive (0.000184) influence on ROA and statistically significant at 5% (p=0.0033). On the overall, the study findings reveal that Human-Resource Cost measured by RB, CC, and ETC has a significant-effect on ROA of listed manufacturing-firms in Nigeria. The study concluded that compensation cost, employee training cost and retirement benefit which are the variables used to measure human resource cost significantly influence ROA. It is therefore, recommended that management of manufacturing firms should invest more on employees’ capacity building through trainings, seminars and workshop and increase compensation packages to enhance financial performance.
ADEGBAYIBI et al. (Fri,) studied this question.