Good Recruiting Equals Shareholder Value

Wednesday, August 17, 2005

According to the Human Capital Index (HCI) study, done by Washington, D.C.-based human capital management firm Watson Wyatt, successful recruiting is a strong indicator of higher shareholder value. The study found that companies that fill positions within two weeks provided a total return to shareholders of 59 percent between 2002 and 2004. On the other hand, companies that required at least seven weeks to fill positions provided an 11 percent return during the same period.

Among the survey’s findings was that the firms with the best shareholder returns fill about half of non-entry-level positions internally, and have moderate annual turnover rates of about 15 percent.

The HCI is a survey of human resource practices that began in 1999. The 2005 survey investigated 147 large North American companies with a track record of at least three years of total returns to shareholders, 1,000 or more employees, and a minimum of $100 million in revenues or market value.

Blogged on 8:07 PM by Upay

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