Human Capital and Organization Performance: A Case of Deposit Money Banks in Nigeria

The study investigates the impact of human capital on the performance of the deposit money banks in Nigeria from 2007 to 2019. Previous related empirical studies have made use of primary data approach which might be highly subjective. The study used expenditures on human resources to proxy human capital while profit after tax is used to proxy performance. The sample covered ten banks which include the five first-tier lenders that hold almost 80% of the entire banking sector asset in Nigeria. Panel data is applied as estimating technique. The result shows that human capital does not have significant positive impact on performance of the banks. However, total asset of the banks remains the most important determinants of performance of the banks. This is an indication that expenditure on human capital reduces the profit of the banks as against the conclusions of some researchers that used primary data. More so, most of the operations of the banks are now capital intensive. The approach used in the study has unraveled the reason behind the incessant staff turnover experienced in the Nigerian banking sector.