Empirical Measurement of the Effect of Human Capital Investment on Return on Assets of Banks in Nigeria
Abstract
This paper is aimed at investigating the relationship between human capital investment and financial performance of deposit money banks in Nigeria. The study employed a survey research design. The population size of the study was two thousand and seventy three (2073) employees of twenty four (24) deposit money banks from six (6) states of the south-south geo-political zone; while the sample size was 335 of the employees. Data was collected by primary means. The findings of the study indicated that employees’ educational investment has a positive and significant relationship with return on assets; staff welfare investment showed negative and significant relationship with return on assets while employee health investment showed a positive and significant relationship with return on assets. The study concluded that these outcomes collectively emphasize the intricate and multifaceted nature of the linkages between human capital components and financial metrics within the banking sector. This led to the recommendation that these banks should continue to prioritize and strategically invest in educational initiatives for the benefits of their workforce as such investments are evidently associated with improved financial performance; and also, banks should carefully reassess and potentially reallocate their investments in employee health and welfare schemes ensuring a more targeted and impactful approach to achieve optimal financial performance.
Keywords
Human capital investment
return on assets
intellectual property
financial
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