Human capital expenditures and company sales turnover

27 May 2021

Employee skills development, health and safety are key human capital expenditures to enhance company productivity and profitability. Therefore, this research evaluated the relationship between human capital expenditures and company turnover. The study was deemed necessary to evaluate how employee’s productivity can be improved in the existing companies through human capital investment, which will result in good performance towards the firm’s profitability. The research inclined on two major objectives – to analyse the relationship between employees’ health and safety investment and turnover, and to evaluate the relationship between employees’ skill development investment and turnover. Applying a quantitative approach, the correlation statistics was used to analyse the secondary data collected over a period of 5 years (2011–2015) from the archives of selected companies in the JSE SRI. Findings from statistical analysis revealed that for objectives 1, P-value was 0.05, which signifies a relationship between health and safety investment and turnover. This also implies that the lesser the Lost time Injury frequency rate due to health and safety the higher the company turnover. For objective 2, the P-value was less than 0.05, which implies that the more companies invest on skills development of their workforce the higher the turnover. Based on these findings, the paper recommends that companies may expedite strategic investment in employees’ health and safety and skills development to enhance growth in corporate sales turnover.