Labour Turnover

• It is a statistical measure of the number of people who leave an organisation’s employ versus the number of people who remain in that organisation’s employment in a given year
• It is expressed as a ratio:
• \dfrac{\text{Number of people who left}}{\text{Avergage number of people employed}}
• This ratio is calculated on a yearly basis
• The number of people left in the formula above includes the number of people who left the organisation for whatever reason in a given year
• The average number of people in the organisation’s employment can be calculated using the formula:
• \dfrac{\text{No. of employees at beginning of the year+Number of people at the end}}{\text{2}}
• People can leave the organisation due to a number of reasons including:
  1. 1. Management action that includes:
        1. Disciplinary action
        2. Dissatisfaction with performance of employee leading to dismissal of the employee
        3. Redundancy
     2. Involuntary separations such as retirement
     3. Voluntary separations such as resulting from  dissatisfaction with job, pay or working conditions
• When a high number of people leave the organisation this is known as high labour turnover
• A high labour turnover is when a high number of the organisation’s employees are leaving and being replaced by the organisation

NB High labour turnover is undesirable click here to learn more about problems associated with high labour turnover.

To access more topics go to the O Level Business Notes