It is a common feature in any concern that some employees leave the concern and others join it. Workers change the job either for personal betterment or for better working conditions or due to compulsion. Labour turnover is the ratio of the number of persons leaving in a period to the average number employed. It is the change in the composition of the labour force in an organisation. It can be measured by relating the engagements and losses in the labour force to the total number employed at the beginning of the period. All the losses must be taken into account regardless of the cause for leaving.
Causes of Labour Turnover
Causes of labour turnover: The main causes of labour turnover in an organisation/industry can be broadly classified under the following three heads:
- Personal Causes
- Unavoidable Causes, and
- Avoidable Causes
Personal causes are those which induce or compel workers to leave their jobs such causes includes the following:
- Change of jobs for betterment.
- Premature retirement due to ill health or old age.
- Domestic problems and family responsibilities.
- Discontentment over the jobs and working environment.
In all the above cases the employee leaves the organisation at his will and, therefore, it is difficult to suggest any possible remedy in the first three cases. But the last one can be overcome by creating conditions leading to a healthy working environment. For this, officers should play a positive role and make sure that their subordinates work under healthy working conditions.
Unavoidable causes are those under which it becomes obligatory on the part of management to ask some or more of their employees to leave the organisation, such causes are summed up as listed below
- Seasonal nature of the business;
- Shortage of raw materials, power, slack market for the product etc :
- Change in the plant location;
- Disability, making a worker unfit for work;
- Disciplinary measures;
- Marriage (generally in the case of women).
Avoidable causes are those which require the attention of management on a continuous basis so as to keep the labour turnover ratio as low as possible. The main causes under this case are indicated below;
- Dissatisfaction with job, remuneration, hours of work, working conditions, etc
- Strained relationship with management, supervisors or follow workers;
- Lack of training facilities and promotional avenues;
- Lack of recreational and medical facilities;
- Low wages and allowances.
Proper and timely management actions reduce the labour turnover appreciably so far as avoidable causes are concerned
Effects of Labour Turnover
It increases cost of production due to the following reasons:
- Cost of selecting/replacing workers
- Cost of training imparted to new workers
- Production planning cannot be properly executed and this results in production loss
- Loss due to defectives and wastage
- Loss due to mishandling of tools, equipments, breakages, etc.
Measurement of Labour Turnover
| Method | Labour turnover | ||||
| Separation Rate Method | Separation during a given period Average number of workers during the period (The average of workers is calculated by taking a simple average of workers at the beginning and end of the period.) | ||||
| Net Labour Turnover Rate Method or Replacement Method | Number of replacements during a given period Average working force during the period | ||||
| Labour Flux Rate Method | Number of separation Number of new employees during period during given period (Average number of workforce during the given period) 100 |
