Human capital disclosure and the contingency view

Abstract

Purpose: Building on an integration of strategic human resource capital management and human capital disclosure literature streams, this paper explores the associations between human resource performance and human resource disclosure in the financial services sector. Design/methodology/approach: Using content analysis and panel regression methods, the paper examines the extent, nature, and information content of human capital disclosures in the financial services sectors in North America during the global financial crisis period. Findings: Labor costs and marginal labor productivity are significantly associated with human resource disclosure and the latter is significantly related to both financial (explicit) and non-financial (implicit or relational) components of the employment relationship. Results show inverted effects between the US and Canadian samples. The findings support a contingency view or “best-fit” approach to human resource capital management. Practical implications: Differences in labor market structures and human capital attributes could have significant impacts on human capital disclosure strategies. More transparent and detailed disclosures regarding human resource capital management may provide useful and relevant information for investors and stakeholders in general. Originality/value: The study provides insights into how labor market structures and human capital attributes jointly affect the extent and nature of corporate disclosures with regards to rents distribution and relational governance between employers and employees.