Define Labour Turnover. What are the Causes, Effects & How to Reduce Labour Turnover?

Labour Turnover

In each organisation, firm or business, it is a common feature that some workers leave the organisation and some new workers join in their place. This change in the labour force of an organisation during a period is known as “Labour Turnover”

In other words, the rate of change in average working force of an organisation during a particular period is called Labour Turnover.

A higher rate of Labour Turnover is not good for the organisation. 3 – 5 % labour turnover seems to be good for the organisation.

Causes Of Labour Turnover

Labour turnover occurs due to different reasons. Such reasons may be classified under 3 heads:-

1.Personal Cause
2.Avoudable Causes
3.Unavoidable Causes

Personal causes

The cause of labour turnover in which the management has no control is known as a personal cause.
➠Retirement of old-age.
➠Dislike for the job or place.
➠Death of employee.
➠Domestic troubles and family responsibility.
➠Accident making worker permanately
➠incapable of during work.

Avoidable Cause

The causes of a Labour Turnover which can be avoided by the organisation and arises due to the negligence is called avoidable causes.


In other words, those causes which can be avoided if management makes a little bit of effort. The causes are:

➠Low wages and allowances.
➠Unhappy relation with co-workers and supervisors.
➠Unsatisfactory working conditions.
➠Trade union rivalry.
➠Lack of promotional facilities etc.
➠Lack of medical, transport, educational facilities etc.
➠Inadequate job security.
➠Lack of retirement benefits.
➠Long working hours.
➠Inadequate training facilities.
➠Lack of housing facilities close to work.
➠Job dis-satisfaction due to improper placement.
➠Bad working environment.
➠Excessive working hours.
➠Absent a non monetary facility.
➠Bad management System.

Unavoidable Causes

The cause of labour turnover which can’t be avoided by the organisation is called unavoidable cause.

In other words, those causes which are out of the control of the management system are called unavoidable Causes. Some of important unavoidable cause of labour turnover are pointed below:-

Due to a change in government policy.
Due to death or chronic illness of the workers.
Permanently disablity due to the accident of the workers.
Retirement due to old age.
Permanent disability of the worker due to an accident.
Marriage( particularly female workers)
Decision to go abroad.
Roving nature of the worker.
Dislike for the job/place.

Other unavoidable Causes

Continuous absence from duty.

Continuous indiscipline.
Continuous inefficient performance

Effects of Labour Turnover

For sake of clarification some of the most important effects of Labour Turnover are highlighted below:

i. Labour turnover needs extra supervision cost, extra repairs and maintenance cost.

ii. The output produced by new workers may not be qualitative.

iii. Newly employed workers may not be real substitutes for experienced one.

iv.It needs to additional cost for selection training and recruitment of new workers.

Reduction/ Control of Labour Turnover

Employers can do nothing to check labour turnover due to personal causes or unavoidable reasons. But it can take appropriate steps to check avoidable causes. The steps to control labour turnover are :

i. Providing proper or good working conditions should be provided to workers or employees.

ii. Adequate safety measures should be taken at the workplace.

iii. Provide company transport to employees where the public is insufficient.

iv. Allow adequate remuneration to the employees or workers.

v. Provides medical facilities to the employees.

vi. Providing housing facilities to the employees at subsidised rent.

viii. Create promotional avenues for employees.

ix. Introduce incentives schemes for workers of the business organisation.

x. Make arrangements for the education of the children of the employees.

xi. Create promotional avenues for employees.

xii. Efficient workers should be rewarded more as compared to inefficient workers.

xiii. Make proper Placement of workers keeping in view their qualification, experience etc.

xiv. Provide adequate retirement benefits such as provided funds, gratuity, pension etc.

xv. Maintain better human relationships between employees in the organisation.

xvi. Create a proper mechanism for the redressal of employees grievances.

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