Labour Turnover (HL IB Business Management)

• Labour turnover measures the proportion of employees leaving a business during a specific time period
• It is expressed as a percentage and is calculated using the formula
   
  
   

 Internal and External Factors that Affect Labour Turnover

• A rising rate of labour turnover can signal internal human resource management problems such as

• • Poor management leading to workers losing commitment
  • A poor recruitment and selection approach leading to staff leaving soon after starting their job
  • Low wage levels compared to those that could be earned elsewhere

  

• External factors can also increase labour turnover in a business
  • A buoyant local economy where workers are attracted to employment opportunities elsewhere 
  • Improved transport links that provide an opportunity for workers to seek work across a wider geographical area

 

The Consequences of high Labour Turnover

Problems	Opportunities
Increased recruitment and selection costs Increased induction and training costs Lower productivity levels as workers settle into new roles	Workers with existing skills can be recruited to reduce the need for training New ideas and creativity introduced to the business New perspective and approaches to problem-solving can improve business performance

Labour Retention

• Labour retention measures the proportion of employees remaining with a business during a specific time period
• It is expressed as a percentage and is calculated using the formula
   
  

• A high level of labour retention means that few staff are leaving the business during a given period