labour turnoverthe proportion of an organization's labour force which leaves its employment over a given period. It can be composed of retirements, deaths, dismissals, redundancy or voluntary resignation. In general labour turnover is strongly influenced by the business cycle. In a period of growth when employment opportunities are expanding, turnover will increase. A certain amount of turnover is believed to be a good thing (as well as inevitable), since it enables the labour force to be revitalized. However, a high level of turnover in an organization can indicate that pay and conditions of employment are perceived as inadequate or that the organization is badly managed.
Two basic measures of leaving rate can be used:
The wastage index is a fairly crude measure because it provides little indication of which employees are leaving. By contrast, the stability index can be used to pinpoint whether those quitting are new recruits or more established employees, and how long the duration of employment tends to be. This is important because turnover is often concentrated amongst new recruits (see INDUCTION CRISIS).
Turnover rates differ between industries. In general, those organizations with well-developed career structures have lower annual rates of turnover than those which rely heavily on the labour market to fill vacancies. See INTERNAL LABOUR MARKET JOB SATISFACTION.