Labour turnover refers to the changes in working staff of a concern during a defined period. It involves the changing of employment from one concern to another. It involves not only the movement of labour from one concern, but also a corresponding number of new employees joining those places which have fallen vacant.

Thus labour turnover involves accessions and separations of workers. Accessions involve the employment of new workers or the re-employment of former workers, while separation includes termination of employment on account of quits, lay-off, discharges, death etc. The following are the methods to find out the rate of labour turnover:

(a) Separation method

(b) Replacement method


(c) Flux method

Causes for Labour Turnover:

The causes can be broadly divided into two categories:

(a) Avoidable Causes:


1. Dissatisfaction with job.

2. Dissatisfaction with wages

3. Poor working conditions

4. Unsuitable working hours


5. Non-co-operative attitude

6. Lack of promotions

7. Unfair method of promotion

8. Unsympathetic attitude of management


9. Inadequate protection 10. Weakness (employee-employer relations)

(b) Unavoidable Causes:

1. Quitting the job (due to inefficiency)

2. Lack of work


3. Retirement or death

4. Accident or illness

5. Marriage

6. Disliking job


7. Personal betterment

8. Worker’s roving nature

9. National service

Effect of Labour Turnover:

1. Fall in production

2. Increased in cost-selection, training etc.

3. Dislocation of even flow of production.

4. Increase of scrap, defective-work, additional supervision etc.

5. Higher accident rate

6. Mishandling of machines

7. Instability of labour and their low team spirit.

Methods of Reducing Labour Turnover:

Following measures are suggested to the management to maintain a happy and contented labour force:

1. Better working conditions may be provided to workers.

2. Selection of candidates must be made on the basis of scientific principles and workers must be placed on appropriate jobs.

3. Well organized programmes must be chalked out to increase their efficiency.

4. There must be a cordial relation between employer and employees.

5. There must be job security and opportunities for career advancement.

6. A good wage policy and incentive plans must be devised.

7. An effective grievance procedure is to be adopted.

8. Labour participation in management must be encouraged.

9. A good working condition conducive to health and efficiency should provide.

10. The personnel department must prepare a periodical report, relating to causes of labor turnover and suggest remedies.