Effect of Human Capital Expenditure on the Profitability of Listed Consumer Goods Companies in Nigeria

Abstract

This study investigates the effect of human capital expenditure on the profitability of 21 consumer goods companies listed on the Nigerian Exchange Group over the 2015–2024 period. Using panel data extracted from audited annual reports. Results reveal a strong positive impact of T&D on ROA (β = 18.42, p < 0.001), indicating that a one-percentage-point increase in training intensity boosts ROA by 18.42 percentage points. Conversely, S&W negatively affects ROA (β = -1.35, p = 0.002), suggesting that wage intensity without skill enhancement erodes profitability. The findings underscore that not all human capital spending is value-accretive training drives strategic advantage, but salaries alone signal inefficiency. The study recommends prioritizing T&D investments and linking salary growth to skill development to optimize long-term profitability in Nigeria’s consumer goods sector.