Effect of Staff Cost on Profitability of Oil and Gas Firms in Nigeria

Abstract

The study examined the effect of staff cost on profitability of a sample of four oil and gas firms listed on Nigerian Exchange Group. Data for the study was sourced annual report of the firms. The study which adopted ex post research design and as anchored on Human Capital Theory. Fixed effect regression model was estimated to test the relationship between staff cost and profitability in the period 2012 to 2023. The study controlled for firm size and growth opportunities. The result of the study revealed that both salaries and wages and medical cost have significant negative effect on return on equity while training cost has a positive but insignificant effect on return on equity. It was therefore recommended that listed oil and gas firms in Nigeria should revisit the salaries and wages in terms of amount and timing of payment, reduce medical cost and increase staff training based on well-designed staff training programmes.

Keywords

• Medical expenses. oil and gas firms
• return on equity
• training
• salaries and wages

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