HUMAN RESOURCE ACCOUNTING AND NATIONAL DEVELOPMENT

Abstract

This study focused on human resource accounting and national development. The continuous neglect of the value of the workforce in Nigeria’s national accounts has consistently understated and undervalued the national assets and the value of GDP. This study evaluated the effect of the capitalisation of human resource costs on national development. Specifically, the study examined the effect of human resource acquisition costs, human resource recruitment costs, and human resource welfare costs on the growth rate of GDP, on the one hand, and on National Assets, on the other hand. The study adopted the ex-post facto research design to obtain secondary data from the 36 ministries in Nigeria’s public sector spanning 2005 to 2024. Results for this analysis were sourced from the CBN Statistical Bulletin and the published Financial Statements of the Office of the Accountant General of the Federation. Results of the analysis show that human resource acquisition costs have a negative and significant effect on GDP growth and appreciation, with the estimated parameter being -0.045. Effect of training costs was negative and non-significant with a parameter of -0.079. Effect of welfare costs was positive and non-significant with a parameter of 0.0033. Human resource acquisition costs have a non-significant effect on national assets, with a parameter of 0.187. Human resource training costs also have a non-significant effect with a parameter of -0.369. Also, a welfare cost of human resource has a non-significant effect on national assets with a parameter of -0.00718. Based on the overall regression p-value, it was thus concluded that human resource acquisition costs, training costs, and welfare costs exert significant influence on Nigeria’s national development, as this tends to have a consequential effect on the GDP as well as the national assets productivity. It was thus recommended that a formal human resource accounting framework should be institutionalised, and there should be isolated reports on costs of recruitment, training, and welfare as a separate category to enable an improved valuation of national development indicators. Human resource acquisition, recruitment and welfare costs should be capitalised and recorded as human capital investments, as well as the establishment of a system to track national development indicators and link them to national human assets. This framework should be adopted as an accounting policy.