High Labour Turnover In The Workplace

Labour turnover is an important and pervasive feature of the labour market. (Martin C., 2003:391) Labour turnover affects both workers and the firms. Workers experience disruption, the need to learn new job-specific skills and find different career prospects. Firms suffer the loss of job-specific skills, disruption in production and incur the costs of hiring and training new workers. (http://www.le.ac.uk/economics/research)

Organizations of all types are giving increased attention to a common problem of business-employee turnover. Traditionally an accepted consequence of employing people, turnover is a growing concern to managers and researchers alike because of its escalating costs and detrimental impact on productivity. (Lucas G. H et. al.,

It is costly, lowers productivity and morale and tends to get worse if not dealt with. (http://labourbureau.nic.in/Asi203c/chptr-III/lab/labour.htm) Employee turnover is a ratio comparison of the number of employees a company must replace in a given time period to the average number of total employees employed during that period. (http://www.wisegeek.com/what-is-employee-turnover.htm)

A high level of Labour Turnover could be caused by many factors:

¾ Inadequate wage levels leading to employees moving to competitors,

¾ Poor morale and low level of motivation within the workforce,

¾ Recruiting and seeking the wrong employees in the first place, meaning they seek more suitable employment,

¾ A buoyant local labour market offering more attractive opportunities to employees, (http://labourbureau.nic.in/Asi203c/chptr-III/lab/labour.htm) and

¾ Miss-match between employee’s personal values, career, goals and plans with the larger corporate

(Williiams C. R. et al, 1994:269)Monetary and hidden costs are associated with employee turnover. When an employee leaves an organization, it costs the company in:

¾ Productivity - When the employee leaves, productivity will usually take a downturn because other workers may have to add the former employee's duties to their own workload, at least temporarily.

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¾ Money - In addition to the costs associated with lower productivity, the company may have to pay employees overtime to get them to take up the slack left by the former employee until a replacement can be found. The organization may also have to face unemployment claims and pay for the cost of recruiting and hiring a replacement.

¾ Time - Not only may the employees will be distracted from their regular duties to cover for a former employee, but the organization will have to spend time and money advertising, interviewing, and hiring a replacement employee.

Besides loss in productivity, money and time, the organization also losses in terms of some indirect costs like lowering of existing employee morale that may be due to increased work or due to the arousing dissatisfaction with the