An industry analysis of the power of human capital for corporate performance : evidence from South Africa

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dc.contributor.authorMorris, Carlaen_ZA
dc.date.accessioned2016-04-26T07:08:26Z
dc.date.available2016-04-26T07:08:26Z
dc.date.issued2015
dc.descriptionCITATION: Morris, C. 2015. An industry analysis of the power of human capital for corporate performance: Evidence from South Africa. South African Journal of Economic and Management Sciences, 18(4):486-499, doi:10.17159/2222-3436/2015/v18n4a4.en_ZA
dc.descriptionThe original publication is available at http://www.sajems.org
dc.description.abstractEven in industrialised emerging economies, the value-generating competencies of a workforce, known as its human capital efficiency, are a key resource for commercial success. The objective of this research is to empirically investigate the relationship between human capital efficiency (as measured by value-added human capital) and the financial and market performance of companies listed on the Main Board and Alternative Exchange (ALT-X) of the Johannesburg Stock Exchange. Return on assets, revenue growth and headline earnings per share were used as financial performance indicators; while market-to-book ratio and total share return were used to measure market performance. Multivariate regressions were performed, with panel data covering 390 companies in the financial, basic materials, consumer services, consumer goods, industrial and technology industries from 2001 to 2011. First, human capital efficiency was found to have no effect on the market performance of listed companies in South Africa. Secondly, higher human capital efficiency was found to result in the extraction of greater returns from both tangible and intangible assets in all industries. Thirdly, higher profitability was found to be associated with higher human capital efficiency in almost every industry in South Africa, with the exception of the technology industry, where human capital efficiency was found to be independent of headline earnings per share. Finally, higher revenue growth was found to be positively associated with human capital efficiency in those industries which are not consumer-driven. In the consumer-driven industries, human capital efficiency contributes to bottom line profitability even though it is not a driver for revenue growth. Overall, the results of this study confirm that human capital efficiency enhances a company’s financial performance, whether it be through a greater capacity for production and service delivery, tighter cost controls or better use of company resources. Management in all South African industries are encouraged to develop the value-creating abilities of their employees through employer-driven personnel enrichment and training programs and by incentivising workers to pursue further education.en_ZA
dc.description.urihttp://www.sajems.org/index.php/sajems/article/view/1191
dc.description.versionPublisher's versionen_ZA
dc.format.extent14 pages
dc.identifier.citationMorris, C. 2015. An industry analysis of the power of human capital for corporate performance: Evidence from South Africa. South African Journal of Economic and Management Sciences, 18(4):486-499, doi:10.17159/2222-3436/2015/v18n4a4.en_ZA
dc.identifier.issn2222-3436 (Online)
dc.identifier.otherdoi:10.17159/2222-3436/2015/v18n4a4
dc.identifier.urihttp://hdl.handle.net/10019.1/98946
dc.language.isoen_ZAen_ZA
dc.publisherUniversity of Pretoriaen_ZA
dc.rights.holderUniversity of Pretoriaen_ZA
dc.subjectHuman capital efficiency -- South Africaen_ZA
dc.subjectCompetitive advantage -- South Africaen_ZA
dc.subjectHuman capital -- South Africaen_ZA
dc.subjectCorporations -- South Africa -- Fiananceen_ZA
dc.subjectOrganizational effectiveness -- South Africaen_ZA
dc.titleAn industry analysis of the power of human capital for corporate performance : evidence from South Africaen_ZA
dc.typeArticleen_ZA
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