2. Statutory Requirements
Related to Labour Cost
Labour Turn over
Definition :-
“Labour turnover is the rate of change in the
working staff of concern during a definite
period. It is the measure of the extent to
which old workers leave and new worker
enter the service of concern in given period”
3. Cause of labour Turnover
Major Causes are divided into 3 categories
1. Personal Causes
2. Avoidable Causes
3. Un-Avoidable Causes
4. Personal Causes
Lack of interest in the work.
Higher Salaries and wages outside
Family commitments
Health problem, Cickness,old age
Death and retirment
Marriage
5. Avoidable Causes
Lower pay and Allowances.
Long and odd of work.
Lack of job satisfaction.
Unhappy with co-workers and supervisor.
Dispute with trade union.
Odd recruitment policy.
Facilties of recreation lacks
Promotion methods
6. Un-Avoidable Causes
Retrenchment due to seasonal trade.
Discharge by long absentisment.
National or state emergence services
War
Expansion and development
Rationalization of industry by automation and
comuterisation.
7. Cost associated with labour
cost
Cost of labour turnover are classified :-
Prevention Cost:-
Eg:- Personal Adminsation ,Cost of welfare
,schemes, other incentive schemes
,pension,bonus,high wage plans
2. Replacement Cost:- Cost for training of
new employee,losses,wastage ,lose of
productivity .
8. Index of Labour Turnover
Important indices of labour turnover
1. Separation Index
2. Replacement Index
3. Flux Index
9. Separation Index
The number of workers leaving the
oranisgation as compared to average number
of workers in given period is consider .
Separation Index= No.of separation in a given period *100
Average No. of worker in given peroid
10. Replacement Index
The number of worker replaced at the vacant
position of the organisation as compared to
the average number of workers in given
period is consider .
Replacement period = No.of replacement in given period * 100
Average no.of worker in given period
11. Flux Index
The addition of the number of worker leaving
the organization as well as the number of
new worker replacement them, as compared
to the average number of workers in given
period is consider .
Flux Index= no. of separation in given period + no. of replacement in given period * 100
Average no.of worker in a given period
12. Impact of Labour Turnover
Cost
Increase cost of selection and training new
workers.
Delay in production.
New worker efficiency.
Decrases in overall production.
13. Measures to controlling labour
turnover
Right Person for Right Job
Conducting employee orientation & induction
programmes.
Improvement in the working conditions.
Providing fair wages and wage incentives.
Promotion by merit and Promotion within.
Labour particaption in Management.
Maintenances of “job Interest” & Job Satisafaction.
Effective commnuication throughout the business at
all levels.li
14. Labour Cost Benefit
Analysis important
To increase the effeces of the employee.
Increase the production in organization.
Retain the employee in organization.
Health relationship among employee and
employer .
