Human Resources Accounting Characteristics and Financial Performance of Oil and Gas Companies in Nigeria

This study examined the relationship between Human Resource Accounting (HRA) characteristics and the financial performance of oil and gas companies in Nigeria. Specifically, the study focused on two key HRA components—Human Capital Cost (HCC) and Training and Development Expenses (TDEX)—and their impact on financial performance metrics, namely Net Profit Margin (NPM) and Return on Assets (ROA). The study employed secondary data extracted from the audited annual reports of six oil and gas companies listed on the Nigerian Exchange (NGX) for the period 2014–2023. PLS regression analysis was used to analyze the data. The findings reveal that human capital cost had a positive and significant effect on net profit margin, highlighting the importance of workforce investments such as recruitment, compensation, and retention programs in improving profitability. Similarly, training and development expenses demonstrate a positive and significant impact on net profit margin. However, the results also show that training and development expenses had a significant negative effect on return on assets, suggesting that the immediate financial costs of training may outweigh short-term efficiency gains in asset utilization. The study concluded that human resource accounting practices play a pivotal role in driving financial performance by optimizing workforce investments. It is recommended that oil and gas companies prioritize human capital investments, adopt performance-based incentives, and carefully balance short-term training costs with long-term organizational goals. Furthermore, the adoption of standardized HRA reporting frameworks is encouraged to enhance transparency and support stakeholder decision-making.