Labor turnover denotes percentage change labor force organization

Labor turnover denotes the percentage change in the labor force of an organization. High percentage of labor turnover denotes that labor is not stable and there are frequent changes in labor force because of new worker engaged and workers who have left the organization. A high labor turnover is not desirable. There must be some labor turnover due to personal and unavoidable causes. It has been observed by the employers that a normal labor turnover, which is between 3% and 5% need not cause much anxiety. But a high labor turnover is always detrimental to the organization. The effect of excessive labor turnover is low labor productivity and increased cost of production, this is due to frequent changes in the labor force give rise to interruption in the continuous flow of production with result that overall production reduced. New workers take time to become efficient. So lower efficiency of new workers increases the cost of production. Selection and training cost of new workers recruited to replace the worker who have left increase the cost of production. New workers being unfamiliar with the work give more scrap, rejects and defective work which increase the cost of production.

New workers being inexperienced workers cause more depreciation of tools and machinery. Due to faulty handing of new workers, breakdown of tools and machinery may also occur very often and hamper production.Normal labor turnover is advantageous because it allows injection of fresh blood into the firm. But excessive labor turnover is not desirable because it shows that labor force is not contended. There fore, every effort should be made to remove the avoidable causes which give rise to labor turnover.

• Good working conditions which may be conducive to health and efficiency should be provided
• Fair rate of pay and allowances and other monetary benefits should be introduced
• Maximum non monetary benefits should be introduced