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Meaning
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%.
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Formula
= No. of employees leaving during the period / Average number of employees employed during the period
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Causes
Causes Of Labour Turnover
Avoidable causes
- 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
Unavoidable causes
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.
Personal causes
- Death
- Retirement due to old age
- Change for a better job
- Change for better working conditions
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Methods
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 )
