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Causes of Labour Turnover, Cost of Labour Turnover Homework Help, Tutoring
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Causes, Cost of Labour Turnover Assignment / Homework Help

Causes of Labour Turnover: The main causes of labour turnover come under 2 heads:
  • Avoidable Causes:

    • Lack of job satisfaction

    • lack of scope for training & promotion

    • Bad working conditions

    • long hours of work

    • lack of facilities for recreation, children's education etc.

    • inadequacy of welfare measures

    • inhumane attitude of management

    • lack of understanding amongst the workers etc.

  • Unavoidable Causes:

    • Unhealthy atmosphere of the locality

    • Retirement & death

    • Leaving for a better chance

    • In case of seasonal industries, retrenchment during off-season

    • Social unrest

    • Marriage of female workers

    • Disablement due to accident inside or outside or disease

    • Due to political reasons or on the ground of health, change of place.
Effect of Labour Turnover:

High labour turnover indicates high cost. The workers who are efficient find their places elsewhere. So, if the efficient workers become dissatisfied with the organization, & leave the job, new set of workers will replace them, but they cannot be expected to give the same output as given by the outgoing efficient workers, from the beginning of the employment. Thus the output will fall & will result in higher cost. On the other hand, if labour turnover is low, it cannot be said that cost of production shall also be low. If average workers in the organization do not have the standard efficiency, they will not be able to find jobs elsewhere. As a result they will not move & labour turnover ratio will become low. But these workers cannot give standard output as they themselves are below standard. More scarps are created by them resulting in higher cost. Output is normally effected by frequent changes in staff & as a result cost increased.

Cost of Labour Turnover:

Cost of labour turnover may be classified into:
  • Preventive Costs:

    • These represent those costs which if incurred; then the leaving of the workers can be prevented.

    For example:
    • Cost of providing better medical, housing, educational facilities, better recreation etc.

    • Cost of providing retirement benefits, incentives, accident compensation etc.

    • Cost of providing better working conditions & better safety measures

    • Cost of providing for promotion & training etc.

    • Cost of maintaining better industrial relations & peace.

  • Replacement Costs:

    • These are those costs which have to be incurred in connection with the replacement of workers who left. For example:

    • Cost of advertisement, selection & recruitment

    • Cost of training new workers

    • Loss of working hours & materials in course of training

    • Cost of scraps, defectives etc. created by the new workers

    • Cost of repairs etc. of machinery in course of training

    • If workers on training meet accident, compensation payable to them.
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