Essay On Labour Turnover

Labor turnover refers to the rate at which an organization is losing its employee. Simply describing it is for what duration employees tend to stay in the organization. Turnover is measured for individual companies and for their industries as a whole. High turnover is unhealthy for the organization’s productivity, if skilled employee are exiting and the organization’s workforce consists of a high percentage of new IT employees. Turnover could be either voluntary or involuntary.

The voluntary turnover refer those exits which are initiated by the employee whereas the involuntary turnover in the employee doesn’t had any choice. The employee doesn’t had any choice in their termination. But the voluntary turnover could be guessed, which could be controlled.

Literature classifies labor turnover into internal or external. Internal turnover refers to internal movement of employees in the same organization.

Internal turnover can be controlled by using different mechanisms, such as internal recruitment or succession planning.

In U.S., during Dec 2000 to Nov 2012, the monthly average turnover rate was around 3.3%. However turnover rates for different job sectors. Research indicates that turnover cost in US industries is around $ 11 billion a year. This cost includes the cost of recruitment and training & development of replacements.

While calculating turnover costs various costs such as cost of recruitment of the replacement, and also including the cost of lost opportunity, the cost of employee turnover has is somewhere around 150% of employees’ remuneration. This cost include both direct and indirect costs. Direct costs consists of cost of the leaving, cost of replacement and cost of transition, and indirect costs include loss in producti...

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...961; Dawson and Lingard 1982; Alvarez and Arias 2003). At the same time, there is some evidence that management affects labour turnover. Thus, Davis and Haltiwanger (1992) and Hamermesh, Hassink and Van Ours (1996) report on variability of turnover rates across firms within narrowly defined sectors of economy, and their persistency within a given firm, which implies that management practices in these firms affect labour turnover. Burgess, Lane and Stevens (2000: 480) have also argued that some managers will be better than others at choosing good matches, and dissolving bad ones – and might even thrive on high turnover. Other managers, and management practices, will need low turnover. It is possible, therefore, that confounding the impacts of turnover itself and management partly mediated through turnover obscures the true role of labour turnover infirm performance.