LABOUR TURNOVER
It is the rate of change in the labour force of a concern
during a specified period of time. In every organisation some
workers leave and new ones are recruited causing labour
turnover.
Terms
Retrenchment: Cutting down expenditures by relieving
employees. In HR termination is common when an
employee___________
Layoff: It is the incapacity of the employer to provide
employment to the employee for a temporary period, so that
the employer can keep his business operational even in a time
of scarcity.
Dismissal: Removal or terminate from the roll
Causes of Labour Turnover
1. Avoidable or Controllable
2. Unavoidable or Uncontrollable
Avoidable or Controllable Causes:
i. Dissatisfaction with remuneration: Low wages may force
workers to look for higher wages elsewhere.
ii. Dissatisfaction with Job
iii. Bad Working Conditions
iv. Dissatisfaction with working hours
v. Unhappy relationship with supervisors
vi. Poor relationship with fellow workers
vii. Lack of promotion prospects
, viii. Lack of proper facilities such as health care,
accommodation, transport, education of children, social
amenities, etc.
Unavoidable or Uncontrollable Causes:
I. Personal Betterment
II. Domestic Responsibilities
III. Illness or Accident
IV. Move from locality
V. Dismissal or discharge due to insubordination, negligence,
inefficiency, etc.
VI. Marriage
VII. Retirement and / or death
VIII. National Service
IX. Redundancy: The essential nature of trade/ industry,
shortage or non- availability of essential inputs., may force
laying off of workers.
Effects of Employee (Labour) Turnover:
High employee turnover increases the cost of production in
the following ways:
1. Even flow of production is disturbed
2. Efficiency of new workers is low and productivity as well.
3. There is increased cost of training and induction
4. New workers cause increased breakage of tools, wastage
oof material, etc.
5. Cost of recruitment and training increases.
Low employee turnover:
, Methods of Measuring Labour Turnover
I. SEPARATION METHOD:
No. Separations in a period X 100
Average number of workers on roll in the period
Average number of workers:
(No. of Employees at the beginning + No. of Employees at the end)/2
It includes both types of workers who leave on their own or those who are
discharged
II. REPLACEMENT METHOD:
No. of workers replaced in a period X 100
Average number of workers on roll in the period
The term replacement does not include those workers who are engaged
due to expansion scheme.
III. Dual / FLUX METHOD
No. Separations + No. of employees recruited during a period X
100
Average number of workers on roll in the period
This rate indicates a change in the composition of the labour force due to
separations and replacements.
Equivalent Annual Labour Turnover Rate = Turnover rate for the period X 365
No. of. Days in the period
It is the rate of change in the labour force of a concern
during a specified period of time. In every organisation some
workers leave and new ones are recruited causing labour
turnover.
Terms
Retrenchment: Cutting down expenditures by relieving
employees. In HR termination is common when an
employee___________
Layoff: It is the incapacity of the employer to provide
employment to the employee for a temporary period, so that
the employer can keep his business operational even in a time
of scarcity.
Dismissal: Removal or terminate from the roll
Causes of Labour Turnover
1. Avoidable or Controllable
2. Unavoidable or Uncontrollable
Avoidable or Controllable Causes:
i. Dissatisfaction with remuneration: Low wages may force
workers to look for higher wages elsewhere.
ii. Dissatisfaction with Job
iii. Bad Working Conditions
iv. Dissatisfaction with working hours
v. Unhappy relationship with supervisors
vi. Poor relationship with fellow workers
vii. Lack of promotion prospects
, viii. Lack of proper facilities such as health care,
accommodation, transport, education of children, social
amenities, etc.
Unavoidable or Uncontrollable Causes:
I. Personal Betterment
II. Domestic Responsibilities
III. Illness or Accident
IV. Move from locality
V. Dismissal or discharge due to insubordination, negligence,
inefficiency, etc.
VI. Marriage
VII. Retirement and / or death
VIII. National Service
IX. Redundancy: The essential nature of trade/ industry,
shortage or non- availability of essential inputs., may force
laying off of workers.
Effects of Employee (Labour) Turnover:
High employee turnover increases the cost of production in
the following ways:
1. Even flow of production is disturbed
2. Efficiency of new workers is low and productivity as well.
3. There is increased cost of training and induction
4. New workers cause increased breakage of tools, wastage
oof material, etc.
5. Cost of recruitment and training increases.
Low employee turnover:
, Methods of Measuring Labour Turnover
I. SEPARATION METHOD:
No. Separations in a period X 100
Average number of workers on roll in the period
Average number of workers:
(No. of Employees at the beginning + No. of Employees at the end)/2
It includes both types of workers who leave on their own or those who are
discharged
II. REPLACEMENT METHOD:
No. of workers replaced in a period X 100
Average number of workers on roll in the period
The term replacement does not include those workers who are engaged
due to expansion scheme.
III. Dual / FLUX METHOD
No. Separations + No. of employees recruited during a period X
100
Average number of workers on roll in the period
This rate indicates a change in the composition of the labour force due to
separations and replacements.
Equivalent Annual Labour Turnover Rate = Turnover rate for the period X 365
No. of. Days in the period
