AQA BUSS4 Research Theme for 2015 - Manufacturing in the UK

Attend a CPD Teacher Briefing on the BUSS4 Theme  |  Order the BUSS4 Research Theme Toolkit | Book places on the BUSS4 Revision Workshops

Business Studies Resources Popular resources on the {my channel} blog Resource tags for the blog RSS Feed for the blog Twitter feed for this blog Teacher Email Resource Newsletter Category listing for this blog Business Studies Blog Home Page
Tracker Pixel for Entry

Q&A - Why might high labour turnover be bad news for a business and what can it do about it?

Tuesday, December 28, 2010
Print Tweet This!Save to Favorites

There are many reasons why a high labour turnover figure (poor employee retention) may cause problems for a firm…

High labour turnover:

• Increases recruitment costs (e.g. advertising for replacement staff; employing temporary staff whilst the job vacancies are filled)
• Can reflect poor morale in workforce and so low productivity levels
• Increases training costs of new workers
• Can result in lower productivity while new/replacement workers settle in

There is no set level or percentage of labour turnover that determines when it begins to have a negative impact on business performance. Everything depends on the type of labour markets in which the business competes. Where it is relatively easy to find and train new employees quickly and at relatively little cost (that is where the labour market is loose), it is possible to sustain high quality and customer service despite having a high labour turnover rate.

By contrast, where skills are relatively scarce, where recruitment is costly or where it takes several weeks to fill a vacancy, labour turnover usually causes problems for a business. This is especially true of situations in which the business are losing staff to direct competitors or where customers have developed relationships with individual employees (e.g. key sales people).

A business can improve its employee retention by offering:

- Financial incentives (e.g. bonus, salary rise)
- Non-financial incentives (e.g. promotion, more decision making power, better communication and consultation)
- Improving the effectiveness of its recruitment and selection processes so that fewer unsuitable employees are recruited in the first place
- Conducting research to understand why employees are leaving (through exit interviews or surveys)

A business may also have to adopt more flexible working practices in order to retain staff and fit in with the changing trend in UK employment and working patterns.  For instance, there is a greater emphasis currently being placed on “flexible hours contracts” and part-time working.  This is mainly to allow for the growing number of women joining the workforce who have to juggle childcare and their working lives.

However, it is important to recognise that there are some advantages of a firm experiencing labour turnover:

- It gives the chance for new people to be brought into the business who may have fresh ideas and up to date market knowledge. 
- Workers with specialist knowledge or expertise can be employed rather than having to train up existing lower skilled employees.

The cameras went behind the scenes at one of tutor2u's exam coaching & revision workshops this summer...


Discover more about our intensive exam coaching & revision workshops desiged to prepare for exams in May & June 2015:

AS/A2 Economics Workshops  |  AS/A2 Business Studies  |  AS Psychology

tutor2u online store

PowerPoint Lesson Activities Teacher Conferences & CPD Courses
Exam Coaching & Revision Workshops Pre-release Case Study Toolkits
A Level Economics Teaching Support Resources for Business Studies
Digital Magazines  

Enter your Email

AQA A Level Business - CPD

Join Graham Prior and Jim Riley to fast-track your preparation for the new AQA A Level Business

Latest resources

Resource categories Blog RSS feed Blog RSS Feed
© Copyright Tutor2u Limited 2013 All Rights Reserved