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Labour Turnover

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Grace Wynne-Williams

on 20 March 2011

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Transcript of Labour Turnover

Labour Turnover The percentage or proportion of the workforce (employees) that leave a business within a given period, normally one year. How is labour turnover measured number of employees leaving the business in a time period
--------------------------------------------------------------------- x 100
average number employed in a time period Factors affecting labour turnover Type of Business - tourism in the UK is seasonal and therefore there is bound to be a higher level of turnover when compared with industries that are not seasonal

Working Conditions - if working conditions are unpleasant, employees won't wan to stay.

Lack of Recognition by Managment - this can affect the level of motivation of the employees and therefore how long they will stay.

Lack of Promotional Opportunities - employees may look elsewhere for more responsibility and recognition.

Poor Recruitment - the 'wrong' staff are hired in the first place and their unsuitability for the job i squickly realised.

Lack of communication in the business or other ineffective leadership may encourage employees to look elsewhere.

Buoyant economy - this usually means that labour can command higher wages. Employees will leave their jobs if they know they can get paid more elsewhere.

Age of the employee - many younger employees do not have families to support and do not own their own homes, so they can change jobs easier and move to other areas = labour mobility is higher. Problems of high labour turnover Cost of recruiting staff increases when labour turnover is high which adds to the total costs. This is because of the recruitment process is costly.

The recruitment process means staff have to spend their time in this process e.g. training new staff = lower output.

If labour tunrover is high during the process of recruitment, the existing staff may be under greater pressure to cover for the lost workers.

Experienced and highly trained staff may be harder to replace and have a greater effect on productivity if they leave.

BUT-- labour turnover = opportunities for original staff to be promoted
AND-- new staff bring new ideas. Improving the level of labour turnover Effective Recruitment - Ensuring the right are hired in the first place may reduce problems later. By paying enough attention to the interview process they will save money.
Effective Training - The induction and traning process should give new employees a sense of belonging as it helps them to understand the job, therefore they feel involved and so stay longer.
Incentive Schemes - Additional payments/ benefits may be offered ro motivate employees.
Promotion - Acts as a reward and as a method of providing responsibility, which are all motivating factors. Offering promotional opportunities may encourage them to stay longer.
Service Awards - A form of recognition or a service award. E.g. holiday time or increased salary.
Job Enrichment - Making the job more interesting may help alleviate boredom and encourage employees to remain at the business.
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