Overview
This lecture explains labor turnover, its causes, the disadvantages of high turnover, and the benefits of maintaining low turnover in businesses.
Causes of Labour Turnover
- Labour turnover is when workers leave their job for various reasons.
- Workers may quit due to dismissal, redundancy, better job opportunities, or lack of motivation.
Disadvantages of High Labour Turnover
- Additional training costs arise from the need to train new employees through induction, on-the-job, or off-the-job training.
- Additional recruitment costs include advertising vacancies and hiring recruitment agencies.
- Recruitment and selection processes are time-consuming, sometimes taking over a month.
- High turnover can damage the company's reputation, making it harder to attract job seekers.
- Customers may lose trust if they believe staff are inexperienced, affecting sales.
- Productivity drops when positions are vacant, reducing output.
- Remaining employees may feel insecure and less motivated, increasing the likelihood of further turnover.
- Increased workload for existing staff may lower output and quality if they are unprepared or unwilling.
- Quality is difficult to maintain if new or less specialized employees replace experienced ones.
Benefits of Low Labour Turnover
- Saves time for human resources managers, freeing them to focus on other tasks.
- Enhances the company's reputation, attracting qualified applicants.
- Recruitment costs are lower since vacancies are rare.
- Training costs are reduced because existing employees already know their roles.
- Retaining experienced staff helps maintain high quality.
Key Terms & Definitions
- Labour Turnover — The rate at which employees leave a business and need to be replaced.
- Redundancy — When a job is no longer needed and the worker is let go.
- Induction Training — Initial training for new employees to introduce them to the company.
- Job Enlargement — Increasing the number of tasks performed by an employee.
- Job Enrichment — Increasing the depth or responsibility of tasks given to an employee.
Action Items / Next Steps
- Review the causes and consequences of labour turnover.
- Understand the strategies businesses use to reduce turnover.