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Turnover on the Rise, Productivity Down, PwC Reports
October 22, 2012
By Michael Foster, Big4.com Blogger
Several industries are seeing a greater rate of personnel turnover, according to a new report by PwC. According to the Big4 firm’s 2012/2013 US Human Capital Effectiveness Report, which analyzed data from over 300 organizations across 12 sectors, more and more people are quitting jobs to find new ones as an increase in employment rates makes it easier to shift jobs. However, the report also concluded that the turnover rate has not gone up for recently hired employees.
PwC also saw that the return on workforce investment has fallen as labor costs rise and short-term productivity gains began to decline. The report suggests that profitability per headcount is falling as high layoff rates after the subprime mortgage crisis subside.
While productivity is down, the report suggested that the quality of new hires has risen. Hiring cycle times have increased and organizations have improved how they hire and retain talent as competition for well-qualified individuals has risen.
The report also concluded that firms have begun investing more in human resources, and that the industry’s function within different verticals is changing. In addition to identifying human capital needs, HR departments are increasingly called upon to have a global focus, plan workforce makeup, and develop predictive analytics models and tools to identify needs in the future.
The report concludes that changes in the economy are providing new challenges for human resources professionals. “As the US economy slowly recovers from recession, several challenges are emerging for HR. Hiring is trending upward, but productivity is declining. The employment uptick has brought higher voluntary turnover rates, but not for new hires. Organizations that understand and adapt to this seemingly contradictory workforce environment will be able to gain the highest return from their investment in the workforce,” said writers of the report.