Labour Turnover

Labour turnover refers to the rate at which employees leave employment. Labour turnover can be evaluated by relating the number of employees leaving their employment during a period of time to the total or average numbers employed in that period.

It may also be defined as engagements and losses in the working force as related to the total number of employees who were on the pay roll at the beginning of the period in question. Abassi SM, Hollman KW (2000).

Causes of Labour Turnover

When we talk about the reasons behind a high labour turnover, we come across the factors which are under control and others which are beyond the regulation of the organization.

Let us now go through the critical reasons behind the labour turnover:

Avoidable Causes

The factors that are related to the organizational facilities and working conditions, the ones which the management could modify to retain the workforce are considered as preventable causes.

Some of the significant issues are related to improper wages, lack of healthcare facilities, inappropriate fringe benefits, cold relations with the management and many others as listed below:

Unavoidable Causes

The workers are sometimes compelled to depart from the organization, for the inevitable reasons. Neither the organization nor the employee can take any step to avoid such circumstances.

Some of these causes include death, severe accident, marriage or retirement of the personnel. The various others are mentioned in the given image:

                                             

Types of Labour Turnover

The labour turnover can be distinguished based on the employees’ spontaneity and the effect it has on the organization. Given below are its four basic types:

                           

1. Voluntary: When a worker willingly exits the organization, i.e., the person resigns from the job position due to any of the circumstances, it is termed as voluntary labour turnover.
2. Involuntary: In the case of involuntary labour turnover, the worker is abolished from the duties by the management. It can be due to any of the reason like failing to comply with the norms.
3. Functional: By saying functional, we mean to improve the organization’s efficiency, the under-performing workers are terminated from work.
4. Dysfunctional: The dysfunctional labour turnover takes place when highly efficient and skilled personnel leaves the job by hampering the overall functioning of the organization.

Labour turnover is usually high in private organizations where a large number of workers are engaged in routine activities that do not require much expertise.

However, the skills-based organizations try to maintain low labour turnover rate. This is because they have to bear a considerably high cost of turnover if their valuable resources exit the company.

Though a small factor, if the employee orientation process is prominent, then the workers tend to stay with the organization for a more extended period.

References

Abassi SM, Hollman KW (2000). "Turnover: the real bottom line", Public Personnel Management, 2 (3) :333-34

Hom PW, Griffeth RW (1995). Employee turnover, South Western college publishing, Cincinnati, OH pp. 200-340

labour-turnover, theinvestorsbook.com, (2019) (Online) Available at  https://theinvestorsbook.com/labour-turnover.html Published on November 2019

Labour Turnover: Definition, Causes and Effects, cost-accounting, (Online) Available at   https://www.accountingnotes.net/cost-accounting/labour/labour-turnover-definition-causes-and-effects/4591, Published on April 1998