LABOUR TURNOVER :

Turnover means change. A change in the financial status of an

organization is called the financial turnover.

A change in the number of employees of an organization is called The

labor turnover

REASONFOR LABOUR TURNOVER:

Avoidable Reasons
(low job satisfaction, low pay, risky or repetitive work etc.).

Unavoidable reasons
(death, retirement, accident, poor health etc.).

Personal Reasons
(retirement due to old age, death, women workers leaving the job,
domestic problems and family responsibilities, dislike of job etc.)

Every good organization prepares a report of labor turnover to refer and rectify the
avoidable causes of turnover. Below are methods used to estimate turnover:

Average No. = (No. of employees at start + No. of employees at end) / 2

1- Separation Method/Rate:
(Number of employees separated in a period / Average number of employees in the
period ) * 100
2- Replacement Method/Rate:
(Number of employees replaced in a period / Average number of employees in the
period) * 100
3- Flux Method/ Rate:
(No. of employees separated + No. of employees replaced) / Average number of
employees in the period } * 100

a)

Dissatisfaction on account of insufficient wages leading

to employees moving to competitors

b)

Low level of

motivation from

employers side and

poor morale within the workforce in a specific industry.

c)

Recruiting and misplacement of employees resulting

in their mobility in search of suitable employment.

d)

floating

and more

local

labour

market offering

better

attractive opportunities to employees.

(i) Increased cost of recruitment and training,

(ii) Decrease in production due to inefficiency and
inexperience of newly appointed workers,
(iii) Loss arising due to defective work and increased wastage
in production,
(iv) Newly employed workers are likely to mishandle tools
and equipment resulting in breakages of tools,
(v) The new workers are more accident-prone and increased
number accidents cause loss of output and increase in
medical expenses and cost of repairs.
(vi) Lack of cooperation and coordination between old and
new workers resulting fall in output and increased cost of
production.
The overall effect of labour turnover, therefore, is a higher
cost of production and lower profitability.

HOW TO REDUCE LABOUR TURNOVER

Following action may be taken to reduce labour turnover:
Pay Problem increasing pay scale & improving pay structure to
remove inequities
Employees Learning to further their Career providing better
career opportunities & ensuring the job, opportunities for training
& development program, implement promotion
Employees Leaving due to Conflict more effective procedure for
handling grievances & improving communication, using resolution
& teambuilding techniques, reorganization of work.
The Induction Crisis improving recruitment & selection process,
ensure job requirement, developing better induction & initial
training program
Shortage of Labour improving recruitment , selection & training,
introducing better method of planning & scheduling work smooth
out peak loads.

PRESENTEEISM

Presenteeism

is

term

used

by

HR

professionals to describe circumstances in

which employees come to work even though
they are ill, posing potential problems of
infection and lower productivity.

When employees go to work sick they risk

infecting their co-workers and will most likely
not be as effective or productive in their work
Stress
Shift work

In every organisation an employee / worker has some

definite working hours with certain responsibility (work
assigned) and if the worker is not present in their working
hours that is called as absenteeism in the organisation.

FACTORS IN ABSENTEEISM :
Moral
Work schedule flexibility
1- Alternative Work Arrangements
2. Compressed Work Week
3. Job Sharing, and
4. Telecommuting

CAUSES OF ABSENTEEISM :

Personal Factors - age, marital status, health, education,

hobbies, extra curricular actitvites.
Work Environment working conditions, ralation with
coworkers & seniors and their attitude
Home Conditions distance from residence, mode of
conveyance, family size, family problems & responsibilities
Economic Issues subsidiary economic interests
Regional Aspects legislations, politics, geographical situations
Organisational Features type & size of company, work load,
nature of work, shift arrangements, management attitude,
personnel policies, leave facilities and medical benefits
Social Reasons religion, community obligations, customs
festivals, marriage and death

The rate of absenteeism is the lowest on pay day; it increases

considerably on the days following the payment of wages and
bonus
It is generally high among the workers below 25 years of age &
those above 40 years of age.
Varies from dept-to-dept within one organisation. Generally it is
high in production dept.
Traditional industries is seasonal in character
The incidence of absenteeism is usually higher in the night
shifts than in the day shifts
The % of absenteeism is generally much higher in mining and
plantation industries as compared to organized manufacturing
industries.

1) Measuring the rate of absence and

sickness

In calculating overall absence rates, organisations can use a

standardized formula to show the amount of time lost.
Lost Time Rate = (Number of days or shifts lost to absence /
Total number of working days/shifts) x 100

2) Measuring Frequency

This reflects the number of absences on average taken by

employees, expressed as a % of the total number of
employees:
Frequency Rate = (Number of spells of absence in the period /
Number of employees) x 100

3) Brad Factor

According to the Chartered Institute of Personnel and

Development the term was 1st coined due to its support
connection with research undertaken by the Bradford
University School of Management in the 1980s.
The Brad factor / formula is used in HRM as a means of
measuring worker absenteeism.
Bradford factor identifies frequent short-term absences by
individuals, by measuring the number of spells of absence.
Attendance / Absence score = (Spells of absence x Spells
of absence) x Total duration of absence
B = S *S x D or B = S2 *D

Adoption of suitable Recruitment procedure

Congenial work environment
Training and development
Employee welfare measures
Two-way communication and prompt Redressal of Grievances &
others as follows:

An organizations employee value proposition consists of

what an organization has to offer that prospective or
existing employees would value and which would help to
persuade them to join or remain with the business.

It will include remuneration which is important but can

be over-emphasized compared with other elements.

These non-financial factors may be crucial in attracting

and retaining people and include the attractiveness of
the organization, the degree to which it acts responsibly,
respect diversity and inclusion, worklife balance and
opportunities for personal and professional growth.

The aim is to become an employer of choice, a firm

people want to work for and stay with.

On being an employer of choice, Purcell et al

(2003)

What seems to be happening is the successful

firms are able to meet peoples needs both for a
good job and to work in a great place.
They create good work and a conducive working
environment.
In this way they become an employer of choice.
People will & want to work there because their
individual needs are met for a good job with
prospects linked to training, appraisal and working
with a good boss who listens and gives some
autonomy but helps with coaching and guidance.