Meaning of Labor Turnover
It tells about the frequency with which workers quit their jobs.
By comparing the number of employees quitting their jobs over a certain period to the overall (or average) number of people employed during that time, the labor turnover can be calculated.
For Example : Let’s say there were 1,000 employees on average in manufacturing in 2018, and 100 of them left the business during this time. Consequently, the labor turnover will be 100*100/1000, or 10%.
= No. of employees leaving during the period / Average number of employees employed during the period
Causes Of Labour Turnover
- Lower wages
- Lack of opportunities for promotion
- Bad working conditions
- Improper manpower planning\
- The unsympathetic attitude of the management
- Lack of proper incentives
- Bitter relationship between management and workers
- Lack of conveyance, accommodation, medical and educational facilities
- Lack of proper training
Sometimes management demands and administrative actions force employees to leave the company. They also quit the jobs of their own free will, for personal reasons.
- Retirement due to old age
- Change for a better job
- Change for better working conditions
Methods of Labour Turnover
Any one of the following three techniques can be used to determine its rate:
Replacement method : The replacement method aids in determining how many employees have been replaced.
( No. of workers replaced during the period * 100 ) / ( Avg. no. of workers in period )
Flux method : People can compute exact labour turnover using the flux technique, which includes workers who have been replaced and those who have departed.
( No. of separations + No. of replacements * 100 ) / ( Avg. no. of workers in period )
Separation method : When you merely need to know how many employees departed the organization, separation is used.
( No. of separations during the period * 100 ) / (Avg. no. of workers in the period )