Companies Offer Investors a Glimpse at Employee Turnover

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Companies are sharing more details about employee turnover as part of new disclosure requirements. But for some investors, the effort doesn’t go far enough.

reported among the highest percentage figures for 2020, at 18%, respectively. CH Robinson’s turnover rate is in line with that of other companies of similar size in its industry, a spokesman said. PRA Health declined to comment.broke out human capital-related risks as a separate component. The airline on March 2 said the hours logged by full-time employees in 2020 fell by 16.6% compared with 2019 following voluntary separation and time-off programs.

Although CFOs often had access to their company’s turnover data before—and therefore don’t have to spend a lot of money or time to meet the new reporting requirement—for investors, seeing these figures in black and white is largely new. Still, many of them said the disclosures remain incomplete, as companies don’t need to provide numbers for previous years.

“There may be companies out there that have a much higher turnover rate, but because they’re not disclosing it, we don’t know,” said Aeisha Mastagni, a portfolio manager at California State Teachers’ Retirement System, a major institutional investor with about $287 billion in assets under management as of the end of February.

The costs of employee churn also remains a mystery to investors. Companies typically bury spending on human capital in selling, general and administrative expenses or in other parts of the income statement. Investors would like to see firms supply new ratios, for example, comparing employee costs to revenue or the number of employees to revenue, said Sandy Peters, senior head of financial reporting policy at the CFA Institute, an association of investment professionals.

 

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