Problems of high labour turnover

• Labour turnover is essential for the health of the organisation:
  1. It prevents stagnation in the workplace through the infusion of new blood and ideas
  2. It allows the organisation to adapt to changing demands
  3. It allows the organisation to replace ageing workforce

Problems of high labour turnover

• While a certain amount of turnover is needed and even desirable
• A high labour turnover is to be avoided as it brings with it certain costs to the organisation
• These costs include:
  1. It results in lost production while a post is not filled/is being filled
  2. More production is lost while the replacement is being trained
  3. Cost of recruiting replacements for example job advertising etc
  4. Training costs
  5. Breaking up of work groups which may undermine their morale
  6. Costs of mistakes made by the trainee for example wastage of material or breakdowns
  7. Overtime and bonuses to other workers who have to pick up the slack until a replacement is found
• High labour turnover is a sure sign of a demotivated workforce within the organisation

Ways to prevent and stem high labour turnover

• A variety of ways can be used to prevent and cure high labour turnover and it its effects
• These include:
• Improving the processes of employee selection, induction and training
• Ensuring that employees are fully utilised
• Improving working conditions
• Promoting group morale and cohesiveness
• Job enrichment
• Job rotation
• Job enlargement
• Demonstrate that promotion prospects exist e.g. recruit internally when filling higher level positions
• Overhauling the organisation’s pay structure
• Conducting research to understand why employees are leaving
• Using financial and non-financial incentives to entice employees into staying

To access more topics go to the O Level Business Notes