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Wastage Analysis

-Gurpreet Kaur

Wastage analysis
Manpower wastage is an element of labour
turnover
Wastage is severance from the organization ,
which includes:
- Voluntary retirement
-

Normal retirement
Resignations
Deaths
Dismissals

Wastage Analysis curve


Y

Induction
Crisis

Levers

Differential
Transit

Settled Connection

Weeks

Time

Months/years

Explanation
The above curve identifies three different
phases
Fist Phase:
During induction phase, marginal employees leave

Second Phase:
During differential transit period, an employee learns about the
Organisation and identifies his role in it.

Third Phase:
While during the period of settled
connection, an employee settles down and
Decide to stay longer

Do you Know?
Wastage decrease with the increase of length of
service
Wastage also decreases with the increased skill
exercises and age of employees.
Wastage of manpower is more in female than
male employees.
Working conditions and size of the firm are also
important variables of manpower wastage.

Different methods of
Wastage Analysis
Labour Turnover Index
Stability Index
Cohort Analysis
Census Analysis

Labour Turnover Index


This index indicates the number of levers as
percentage to average number of employees.
Average number of employees employed in a
given time period is decided by adding the
employees at the beginning and end and then
dividing the same by two
EXAMPLE:
At the beginning of a year, a firm has 250
employees, while at the end it has 230. Assume
no recruitment has been made in between
Compute labour turnover Index.

Labour Turnover Index


Solution:
Number of employees leaving
= 250-230 = 20
Average number of employees employed = 250+230
2
=240
Labour Turnover =
* 100
Number of employees leaving
Average number of employees employed
= 20/240*100= 8.33%

Stability Index
This index indicates stable workforce
percentage for a given period and
can be computed as under:
Number with more than 1 year service now
Total Employed one year ago

* 100

Cohort Analysis
Cohort means homogeneous groups.
Cohort analysis takes into account the length
of service
EXAMPLE:
In the table below, we have illustrated a
cohort analysis, assuming number of people
engaged in the beginning of a year as 500
and number
of leavers for different length
of service as under

Cohort Analysis
EXAMPLE

Length of
Service

No. Leaving

Cumulative
Leavers

Remaining

Survival as
% of leaving

500

100

50

50

450

90

45

95

405

81

40

135

365

73

35

170

330

66

30

200

300

60

1st Year

50

2nd Year

45

3rd Year

40

4th Year

35

5th Year

30

Cohort Analysis
The percentage remaining in column 5 can
be presented on a graph paper, which is
known as survival curve.
which is obtained by using following
formula
* 100

Number remaining at a given time


Number engaged at the start

Census Analysis
Census analysis requires three
sets of data as under:
i. The number of employees at the
beginning of the census,
ii. The number of employees at the end of
the census, and
iii. The number of leavers during
the census period

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