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Materiality Matters: Employee Turnover in Information Technology

August 13 2026
1 min read
Lower Turnover Has Historically Correlated with Higher Return
AB Charts FPO

Historical analysis does not guarantee future results.
MSCI ACWI is equal weighted; the index is divided into five quintiles, with Q1 comprising the highest annual information technology (IT) employee turnover and Q5 comprising the lowest annual IT employee turnover. 
Through December 31, 2025
Source: Bloomberg, MSCI, company reports and AllianceBernstein (AB)

Competition for AI talent has intensified. Employee turnover may matter more than investors think.

There’s a wide disparity in the materiality of environmental, social and governance (ESG) factors across industries and markets. In our view, understanding this dynamic is key to incorporating ESG risks and opportunities into portfolio construction.

Factor attribution analysis can help investors identify which ESG factors have historically been most material within a given industry and market.

Employee turnover is one such factor. Within information technology (IT), competition for highly skilled talent has intensified as companies race to develop AI capabilities, driving aggressive recruiting tactics and employee poaching that have contributed to high turnover across the industry.

Our research shows a generally inverse relationship between employee turnover and average stock returns relative to a market benchmark. In fact, since 2010, we see a nearly 10 percentage-point annual difference in relative equity returns between IT firms in the lowest quintile of employee turnover and firms in the highest quintile (Display).

The views expressed herein do not constitute research, investment advice or trade recommendations, do not necessarily represent the views of all AB portfolio-management teams and are subject to change over time.

MSCI makes no express or implied warranties or representations, and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.