Staffing stats linked to profit

15% turnover the magic number
By Uyen Vu
|Canadian HR Reporter|Last Updated: 09/12/2005

Most employers know high turnover rates don’t lead to healthy shareholder returns, but how many are aware single-digit turnover rates can lead to worse business results?

A Watson Wyatt Human Capital Index study, which tracks the correlation between HR practices and total shareholder returns, has produced some surprising results. Among them is the finding that firms with a five-per-cent turnover rate actually obtain lower shareholder returns than firms with a 43-per-cent turnover. Both fare worse than firms with a turnover rate of 15 per cent.

Graham Dodd, national practice director of the Watson Wyatt consultancy house, said in a series of six surveys conducted since 1999, the same results keep showing up, “although we’ve found that in different economic times, different factors become more important.”