Labour turnover.understand methods.
In this Video we will discuss about:- 1. Measurement of Labour Turnover 2. Causes of Labour Turnover 3. Effects 4. Cost 5. Control 6. Treatment of Cost.
Contents:
Measurement of Labour Turnover
Causes of Labour Turnover
Effects of Labour Turnover
Cost of Labour Turnover
Control of Labour Turnover
Treatment of Cost of Labour Turnover
2. Causes of Labour Turnover:
Labour turnover may result from many causes. The causes responsible for labour turnover may be classified into two broad categories.
They are:
1. Avoidable Causes of Labour Turnover.
2. Unavoidable Causes of Labour Turnover.
The various avoidable causes responsible for labour turnover are:
1. Faulty Selection,
2. Lack of proper training facilities,
3. Low wages and allowances,
4. Unhappy relations with co-workers and supervisors,
5. Unsatisfactory working condition,
6. Trade union rivalry,
7. Lack of medical facilities, transport facilities, etc.
8. Inadequate job security and retirement benefit,
The various unavoidable causes responsible for labour turnover are:
i. Death or retirement,
ii. Illness or accident making the worker permanently handicapped,
iii. Domestic disputes,
iv. Long period of ill-health,
v. Domestic responsibilities to book after old parents,
vi. Change of service for personal betterment,
vii. Inefficiency of the workers,
viii. Immoral character of worker,
ix. Conviction of the worker in criminal suits, and
x. Marriage pregnancy etc. in the case of female workers.
3. Effects of Labour Turnover:
A certain amount of Labour turnover will always take place. To a limited extent this may be welcome particularly at the lower management level as it creates vacancies for internal promotions which act as motivation for young and ambitious workers. Moreover, new workers bring new ideas and methods of doing work from other organisations.
Labour turnover is expensive and generally it should be minimised because it leads to increased cost of production.
4. Cost of Labour Turnover:
As stated above, labour turnover involves costs. From the point of view of management, labour turnover costs may be classified into two categories.
They are:
1. Preventive Costs.
2. Replacement costs.
1. Preventive Costs:
Preventive costs refer to all those costs which are incurred by a concern to keep the workers satisfied and to prevent them from giving up their jobs.
Preventive cost includes the following:
i. Cost of providing good working condition.
ii. Expenses incurred on the maintenance of good relation between the workers and the management.
iii. Cost of free medical facilities given to workers and their formalities.
iv. Cost of welfare services, such as recreation facilities, free travel facilities, subsidised centres facilities, free education to children, etc.
v. Free housing facilities.
vi. Cost of incentive wage scheme introduced.
vii. Gratuity, pension and provident fund given to workers.
2. Replacement Costs:
Replacement costs refer to costs associated with the replacement of workers. In other words, replacement costs include expenses losses and wastages arising from the appointment of new inexperienced workers in the place of old experienced workers and costs of recruitment and training of new workers.
Replacement costs include the following:
i. Loss of output resulting from the loss of trained and skilled workers.
ii. Loss of output arising from the delay in the recruitment of new workers.
iii. Loss resulting from the deterioration in the quality of goods produced by the new inexperienced workers.
iv. Loss resulting from the scrap and defective work turned out by the new workers.
v. Loss of output, medical expenses, compensation for injury and costs of repairs to Plants and Machinery resulting from increased accidents due to the appointment of new and inexperienced workers,
vi. Cost of recruitment of new workers.
vii. Cost of training to new workers.
viii. Cost of tools and machine break down due to faulty handling by new workers.
ix. Cost of extra scrap and defective work of new workers.
5. Control of Labour Turnover:
It is true that labour turnover resulting from unavoidable causes cannot be controlled. But the labour turnover arising from avoidable causes can be controlled through certain measures.
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