Exploring the impact of human capital expenditure on SMMEs’ financial performance in the South African informal sector

The primary aim of the research is an investigation of the impact of human capital revenue expenditure on the financial performance of small, medium-sized and micro-enterprises (SMMEs) within the South African informal sector. Quantitative data downloaded from the portal of Statistics South Africa specifically the National Survey of Employers and the Self-Employed, was utilised, yielding a final sample of 1658 respondents. Secondary data analysis was used as research technique. Inferential statistical analyses were performed to investigate the research hypotheses. Results established that human capital expenditure statistically significantly predicts the variance in annual turnover and net profit. More specifically, 15.3% of the variance in annual turnover and 20.4% of the variance in net profit could be attributed to human capital revenue expenditure. It is recommended that further research be conducted to verify the results presented as the current study is exploratory in nature.