Labour turnover

Labour turnover is a measure of the proportionof people leaving relative to the average number of people employed.

Management might wish to monitor labourturnover, so that control measures might be considered if the rate of turnoverseems too high

Causes of labourturnover – avoidable:

Poor remuneration

Poor working conditions

Lack of training opportunities

Lack of promotion prospects

Bullying in the workplace.

Causes of labour turnover – unavoidable:

Retirement

Illness/death

Family reasons (e.g. pregnancy)

Relocation

Efficient managers will investigate highlevels of labour turnover and aim to keep that turnover rate at a minimum

Replacement costs include the following:

Advertising costs

Cost of selection (time spent interviewing etc.)

Training new employees

Reduced efficiency until the new employee reaches the required skill.

A high labour turnover rate tends to lower the performance of employees who remain in the organisation. 

Such employees may become restless and resentful of the extra burden of training new members and of additional temporary duties imposed upon them. 

In order to keep the labour turnover rate to a minimum, organisations should aim to prevent employees from leaving .

Such preventive measures come with their own costs, known as preventive costs.

In order to keep the labour turnover rate to a minimum, organisations should aim to prevent employees from leaving .

Such preventive measures come with theirown costs, known as preventive costs.

Preventive costs include the costs associated with escaping the avoidable causes of labour turnover:

Pay competitive wages and salaries ifremuneration is poor 

Improve poor working conditions

Offer good training opportunities

Make sure promotion prospects arise asnecessary

Stamp out bullying in the workplace

Investigate high labourturnover rates objectively