BACKGROUND OF THE STUDY
In recent times, world attention is being focused on the importance of human resources development as panacea to problems associated with financial growth of nations. This is due to the fact that the growth of tangible capital stock of a nation depends to a considerable degree on human capital development which is the process of increasing knowledge, the skills, and capacities of all people of the country. Without adequate investment in developing human resources which is the process of increasing knowledge, skills and the capacities of people in the country, the possibility of the growth of that nation might be minimal (Gyang, 2011). Human resources have been recognized as one of the key determinants of growth today (OECD, 2011). This applies especially to modern economies such as Switzerland, United States of America, China, and Japan among others as companies with a large share of skilled labor have moved to other countries of the world as a consequence of their comparative intellectual capital advantage (Polasek et al., 2011). As the global economy shifts towards more knowledge -based sectors, skills and human capital development becomes a central issue for policy makers and practitioners engaged in economic development both at nation or regional level (OECD 2011). Human development refers to the process of acquiring and increasing the number of persons who have the skill, education, experience which are critical for the economic and political development of a country. Human capital development is thus associated with investment in man and his development as a creative and productive resource (Jhingan 2012). Schultz (2013) categorized and developed human resources into six ways: (i) Heath facilities and services: – this involves all expenditure that affects the life expectancy, strength and stamina, and vigor and vitality of the people, (ii) On – the job training which includes old type apprenticeship organized by firms, (iii) Formally organized education at elementary, secondary school and higher level, (iv) Study programs for adults that are not in agriculture, (v) It involves migration of individual and families to adjust changing job opportunity (factor mobility), (vi) Finally, transfer or importation of technical assistance, expertise and consultants. According to Galbraith, he affirms that financial growth is a function of investment on human capital development rather than physical capital becomes more productive if a country possesses efficient human capital. Therefore, there is a complementary role between physical capital and human capital. With numerous pathways, there is causal system linking education and health. Human resources development is essential in any place that would like to be dynamic and growth oriented. Unlike other resources, human resources have rather unlimited potential capabilities. The potential can be used only by creating a climate that can continuously identify, bring to surface, nurture and use the capabilities of people. A number of human resource development techniques have been developed in recent years to perform the above task based on certain principles. This unit provides an understanding of the concept of human resource development system, related mechanisms and the changing boundaries of human resource development.
In today’s increasingly competitive business environment, organizations keep evolving ways of ensuring their continued survival and improving organizational performance on a sustained basis. Effective Human Resources Management (HRM) provides a means, through which an organization attracts, retain, develop, motivate and adequately compensate employees for a sustained growth and increased competitiveness. One important aspect of HRM is Human Resources Development. Human Resources Development (HRD) is a framework for the expansion of human capital within an organization through the development of both the organization and the individual to achieve performance improvement. It is the integrated use of training, organizational and career improvement effort to improve individual, group and organizational effectiveness [Kelly, 2011] . Human resource development is concerned with the provision of learning, development and training opportunities in order to improve individual, team and organizational performance [Armstrong, 2016] . The availability of education and health services to people is one of the major ways of improving the quality of human resources. It provides an economy with healthy trained human resources required for financial growth and development (Bloom & Canning, 2013). Prior to the Second World War (1939-1945), the literature argued that the relationship between education and economy was insignificant and subsequent studies confirmed that the economy depended on education to foster financial growth (Schultz, 1961; Denison, 1962). In addition, health is regarded as being fundamental to financial growth and development. It is one of the key determinants of economic performance both at the micro and macro levels and a direct component of human well-being that increases the individual’s capabilities (Bloom & Canning, 2013). Health is a form of human capital (Grossman, 2015). Also, literature has argued that population quality is the crucial factor of production and emphasized the merits of investing in education and health (Schultz, 1992; Bloom & Canning, 2010; 2013). In the effort to enhance the contribution of human capital to financial growth among the emerging economies, the United Nations Millennium Development Goals (MDGs) argued that a reduction by three-quarters in maternal mortality, halting the spread of HIV/AIDS, malaria and other major diseases by 2015 will be completely indefinable for Sub-Sahara African countries like Nigeria if sufficient attention is not paid to health expenditures. Akin to this, eradicating illiteracy is also one of the objectives of the (MDGs) that will turn into a mirage if adequate attention is not given to educational expenditure by the federal government. The thrust of this study therefore is to examine the effect of human resource development on financial growth in Nigeria.
STATEMENT OF THE PROBLEM
Nigeria as one of Africa’s biggest economies has been faced with the problem of human resource development over the years. In spite of all the abundant resources the Nation has been endowed with, Nigeria has failed to realize her full development potential in terms of sustainable human resource development or people oriented development like many other prosperous economies of the world that have adopted a similar strategy to boost their economic growth. A large percentage of Nigeria’s population estimated to be 182.2 Million according to World Bank, (2016) remain at rather low levels of literacy and often with insufficient access to education and health care. The government should be able to put more funds into education, healthcare, training, skills and other related factors in order to curb the persistent challenge of high unemployment rate, inadequate education, poor health and so on which will in turn feed back into the economy and thus promote financial growth. Human resource development problems in Nigeria appear to be on the increase. The unemployment phenomenon seems to be compounded with the absence and misplacement of human resource to capability of the public and private sectors of the economy to provide such opportunity for human resources at their disposal. This problem of Nigeria under-employment lies primary with the neglect of its human resources potential. This study therefore, is aimed at finding out the effect of human resources for financial growth and development of the country.
1.3 AIM OF THE STUDY
The major purpose of this study is to examine the effect of human resource development on the financial growth of Abuja District. Other general objectives of the study are:
To study the importance of human resources for financial growth and development To study how best to manage the human resources for financial growth and development. To examine the effect of human resources development on the financial growth of Abuja District To ascertain, evaluate and examine the extent to which increase in investment of human resources development could serve to financial growth and development. To examine the relationship between human resources development and financial growth of Abuja District To find out the problem to the management of human resources
1.4 RESEARCH QUESTIONS
What are the importance of human resources for financial growth and development? How best can the human resource be managed for financial growth and development? What is the effect of human resources development on the financial growth of Abuja District? To what extent has the development of human resource contributed to the financial growth and development? What is the relationship between of human resources development and financial growth of Abuja District? What are the problems involved in the management of human resources for financial growth and development?
1.5 RESEARCH HYPOTHESES
H0: There is no significant effect of human resource development on the financial growth of Abuja District.
H1: There is a significant effect of human resource development on the financial growth of Abuja District.
H0: There is no significant relationship between human resource development and financial growth of Abuja District.
H1: There is a significant relationship between human resource development and financial growth of Abuja District.
1.6 SIGNIFICANCE OF THE STUDY
Human Resource development plays a vital role in the financial growth of Nigeria. The importance of this research work is premised on finding how human resources development in Nigeria can be adequately mobilized for the benefit of the financial growth. It is hoped that it will give importance to the need for increased and more genuine investment opportunities on human resources in Nigeria. Also enable the government and appropriate authorities to make adequate economic and educational provisions for enhancing the development of human resources.
It will also enhance government, private sector and general public participation contribution in addressing this human resource development in organizations in Nigeria. The study will be of immense help to other people and students who might wish to carry out other researches in the field.
1.7 SCOPE OF THE STUDY
The study is based on the effect of human resource development on the financial growth of Abuja District.
1.8 LIMITATION OF STUDY
Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.9 DEFINITION OF TERMS
Human resource/human capital: Human capital is the knowledge, skills and abilities residing with and utilized by individuals.
Financial Growth: This is defined as the developments in the size, efficiency and stability of and access to the financial system. It involves the establishment and expansion of institutions, instruments and markets that support this investment and growth process.
Human Resources Development: This is a systematic process of training and growth by which individuals gain and apply knowledge, skill, insights and attitude, manage work and personnel effectively.
Human Capital Investment: This consists of expenditures on education, training and medical care. Human capital will be measured by (staffing, training & development, incentives policy, and employee’s loyalty).
Firms’ performance: This encompasses specific areas of firm’s outcomes: (a) financial (profits, return on assets, return on investments); (b) market performance (sales, market share); and (c) shareholder return (total shareholder return, economic value added).