What are the Methods used to Calculate Labour Turnover?

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There are various methods to measure labour turnover. Although the different methods give emphasis on different aspects, it is important to point out that once a particular method has been adopted it should be used consistently in order to facilitate comparison. Labour turnover may be measured with the help of the following methods:

1. Accession Method

2. Separation Method

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3. Replacement Method (Net Labour Turnover Method)

4. Flux Method

1. Accession Method: Accessing means the additions to the pay roll. Under this method, labour turnover is calculated by dividing total number of accessions during a period by the average number of workers during that period and multiplying the result by 100. Putting it in educational form:

Number of accessions in a period

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Average number of workers in the period

2. Separation Method: Separations are due to quits, discharges, retirements and deaths. Under this method, labour turnover for any given period is calculated by dividing the total number of separations by the average number of workers during that period and multiplying by 100. Putting it in educational form:

Number of separations in a period

Average number of workers in the period

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3. Replacement Method: This method takes into account only the actual replace of workers during a given period irrespective of the number of workers leaving. Lab turnover is found out by dividing the number of replacements during a given period the average number of workers during the period and multiplying it by 100. Putting in educational form:

Number of replacements in a period

Labour Turnover =

Average number of workers in the period 4. Flux Method: As the name suggests, it is the combination of the two methods separation and replacement. Labour turnover is found out by adding all separations a replacements and dividing by the average number of workers during a given period a; multiplying the result by 100. Putting it in educational form:

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Number of separations in a period + Number of replacements in a period

Average number of workers in the period

Illustration-1

The personnel department of a company has supplied the following information relating to its labour force. Calculate labour turnover rate using the different methods.

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Number of workers at the beginning of the year – 1,800 Number of workers at the end of the year – 2,200

During the year 30 workers were discharged and 10 left the company. During the year 440 workers were engaged out of which only 20 workers were appointed against vacancies caused by the number of workers separated and the rest were engaged n accordance with an expansion scheme.

Number of Separations in the year + No. of Replacements in the year Average number of workers in the year.

IIlustration-2

The cost accountant of a company has calculated labour turnover rates for year ended 31st March, 2008 as 6% and 8% respectively under replacement method a separation method. If the number of workers left and discharged during the year is 8 find out the number of workers replaced.

No. of Separations Average No. of workers

Average No. of workers

Illustration-3

Calculate net annual labour turnover rate from the following particulars:

No. of employees on 1.4.2007 – 3,500

No. of employees on 31.3.2008 – 4,500

No. of employees discharged during 2007-08 – 105

No. of employees resigned during the year – 45

No. of employees replaced due to discharge and quits – 80

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