What is labour turnover and why is it measured?
How is labor turnover calculated and measured?
Labor turnover is calculated by dividing the number of employees who leave the organization (voluntarily or involuntarily) during a specified period by the average number of employees during that same period. The result is multiplied by 100 to express it as a percentage. Labor turnover can be measured on a monthly, quarterly, or annual basis.
What are the implications of high labor turnover for a business?
High labor turnover can have several implications for a business. It can lead to increased recruitment and training costs, reduced productivity and efficiency, disruption to operations, knowledge and skill gaps, decreased morale among remaining employees, and potential negative impacts on customer satisfaction. High labor turnover may also signal underlying issues such as poor management practices, low employee engagement, or dissatisfaction with working conditions. Managing and reducing labor turnover is important for maintaining organizational stability, continuity, and employee satisfaction.