Labour turnover refers to the rate at which employees leave and are replaced within an organization, influenced by various factors such as job dissatisfaction and personal circumstances. In India, the document details significant labour turnover statistics across states and industries, highlighting trends in accession and separation rates, with the private sector showing marginal growth while public sectors experience declines. The document also compares global labour turnover rates across different industries, noting significant differences in retention rates.

1. Labour Turnover – A HR
Challenge
Name Souvick Mandal
Roll- 95/HRO/111011
Registration No- 120-1121-0192-11
Guided By- Prof. Amitabh Bhattachariya

2. What is it?
• Labour turnover is the movement of people out of the
organisation. It is usually convenient to measure it by
recording movements out of the firms on the
assumption that a leave is eventually replaced by a
new employee. The term separation is used to denote
an employee who leaves for any reasons; labour
turnover is the rate of change in number of employees
of a concern during a definite period.

3. Causes
Avoidable Unavoidable
• Dissatisfaction with wage • Personal betterment
and rewards. • Family circumstance
• Dissatisfaction with working • Climatic condition
conditions. • Community condition
• Dissatisfaction with • Health condition
personnel policies-
• Marriage (specially for
• Dissatisfaction with the job.
women)
• Other related factors. • Retirement and death.

4. Effects
• Interruption in the continuous process of production with
result that overall production is reduced.
• New workers take time to become efficient. Hence lower
efficiency workers increase the cost of production.
• Selection and training cost of new workers recruited to
replace the workers who have left increase the cost of
production.
• More scrap, rejects and defectives which increases the cost
of productions.
• cause more depreciation of tools and machinery.
• Accident may also happen very often and hamper the
production process & organizational harmony.

5. Measurement of labour turn over
Separation Method.=
Number of workers left during a period * 100
Average number of workers on roll during that period
Flux Method.=
Number of workers separated + Number of workers added during a period * 100
Average number of workers on roll during that period
Replacement Method.=
Number of workers replaced during a period * 100
Average number of workers on roll during that period

6. Cost of labour turnover
• Inefficiency of new worker
• Employment department
• Training and induction
• Cost of tools and machine
breakage
• Accident frequency and
severity
• Cost of scrap and defective
work

7. Labour Turnover Scenario in India
• At all India level, 60.08
percent of the factories
reported Labour Turnover in
their establishments.
• At all India level, the rate of
accession during the year
2002 was recorded as 19.20
percent as against 19.27
percent during the previous
year.
• Whereas, the overall
separation rate was reported
as 18.24 percent as against
19.18 percent in 2001.

8. Labour Turnover in States
• Highest rate of accession • The lowest rate of
was observed in Punjab accession was recorded in
(54.08 percent) followed West Bengal (4.61
by Haryana (35.22 percent) followed by
percent) and Uttar Kerala (6.10 percent) and
Pradesh (27.32 percent). Assam (6.13 percent).
• The highest rate of • lowest rate of separation
separation was also was observed in Assam
observed in Punjab (49.03 (5.28 percent) followed by
percent) followed by West Bengal (5.33
Haryana (32.09 percent) percent) and Kerala (8.35
and Jammu & Kashmir percent).
(27.06 percent)
There were 11 States where accession rate was observed to be more than 20 percent
and 9 States where separation rate was recorded to be more than 20 percent.

9. Labour Turnover in Industries
• During 2002, the highest • The highest and lowest
rate of accession was separation rates were
recorded at 115.14 also reported in the
percent in industry group industry groups '142-
'142-Mining and Mining and quarrying,
quarrying, n.e.c.'. n.e.c.' (120.12 percent)
• The lowest rate of and �182-Dressing and
accession was reported in dyeing of fur,
industry group �182- manufacturing of articles
Dressing and dyeing of of fur� (1.67 percent),
fur, manufacturing of respectively.
articles of fur� at the
rate of 3.33 percent.
Out of 63 industry groups, separation rate was higher than
accession rate in 30 industry groups, meaning thereby, a net
decrease in employment of directly employed regular workers
during 2002 in these industry groups.

10. Labour Turnover in Sectors by States
• At all India level, among • All India level among
sectors, the rate of sectors, the highest rate of
accession was highest at separation was reported in
19.43 percent in Private Private Sector (18.36
Sector, followed by 14.56 percent), followed by Joint
percent in Joint Sector and Sector (17.35 percent) and
merely 7.62 percent in Public Sector (9.57
Public Sector. percent).
It is observed that at all India level both Public Sector and
Joint Sector witnessed a decrease in employment of
directly employed workers by 1.95 percent and 2.79
percent, respectively, during the year, whereas, in Private
Sector a marginal increase in employment of such
workers of 1.07 percent was recorded

11. Cont..
• In Public Sector, the highest • In Joint sector, the highest
rate of accession at 56.40 rate of accession at 59.66
percent was observed in percent was observed in
Rajasthan, whereas, the Himachal Pradesh, whereas,
lowest accession rate of the lowest accession rate of
0.82 percent was observed 0.99 percent was recorded
in Kerala. in Orissa.
In Private Sector, the highest and lowest
rates of accession were reported in
Punjab (54.78 percent) and West Bengal
(4.26 percent), respectively.

12. Cont..
• The highest and lowest • In Joint Sector, the
separation rates, in Public highest rate of separation
Sector, were observed in was also recorded in
Daman & Diu (44.44 Punjab (53.32 percent),
percent) and Chattisgarh whereas, the lowest rate
(0.93 percent), was reported in Goa (0.66
respectively. percent).
In Private Sector, the highest and lowest separation
rates were reported in Punjab (49.37 percent) and Assam
(5.07 percent), respectively.

13. Labour Turnover in Sectors by
Industry
• In Public Sector, the highest rate • In Joint Sector, the highest rate of
of accession at 104.65 percent accession at 47.73 percent was
was observed in industry group recorded in industry group
�014-Agricultural and animal �151-Production, processing
husbandry service activities, and preservation of meat, fish,
except veterinary activities', fruit, vegetables oils and fats',
whereas, the lowest rate of 0.20 whereas, the lowest rate of 0.41
percent was recorded in industry percent was recorded in industry
group �222-Printing and service group �222-Printing and service
activities related to printing activities related to printing�.
In Private Sector, the highest accession rate at 115.14 percent was
observed in industry group '142-Mining and quarrying, n.e.c.', whereas, the
lowest rate of 3.33 percent was observed in industry group '182-Dressing and
dying of fur, manufacture of articles of fur�.

14. Cont..
• Public Sector, the highest rate of • In Joint Sector, the highest rate of
separation (127.91 percent) was separation (120.22 percent) was
reported again in industry group observed in industry group '210-
'014-Agricultural and animal Manufacture of paper and paper
husbandry services activities, product�, whereas, the lowest
except veterinary activities', rate (0.41 percent) was reported
whereas, the lowest rate of in industry group '222-Printing
separation (0.85 percent) was and service activities related to
reported in industry group '291- printing�.
Manufacture of general purpose
machinery�.
In Private Sector, separation rate was the
highest (120.12 percent) in industry group
'142-Mining and quarry n.e.c.', whereas, the
lowest rate of separation (1.67 percent) was
reported in industry group '182-Dressing and
dying of fur, manufacture of articles of fur�.

15. Reporting During 2000 1999
Labour the ----------------- -----------------
Turnover Year Acc. Sep. Acc. Sep.
--------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
--------------------------------------------------------------------------------
1 Jammu & Kashmir 70.54 4235 31.70 31.11 23.40 26.59
2 Himachal Pradesh 82.98 8988 31.40 28.32 30.50 27.99
3 Punjab 90.07 116100 48.89 43.09 51.09 46.94
4 Chandigarh 93.50 4245 27.74 26.84 22.06 24.00
5 Uttaranchal 66.42 5589 16.48 16.42 - -
6 Haryana 82.90 62389 34.39 32.87 37.82 29.56
7 Delhi 77.88 62634 25.36 27.93 25.57 28.79
8 Rajasthan 77.12 67142 27.61 25.06 24.08 25.26
9 Uttar Pradesh 69.04 116262 30.94 27.80 32.06 32.26
10 Bihar 52.71 10137 22.93 16.10 9.30 10.27
11 Assam 31.05 13937 6.74 3.87 3.28 2.91
12 West Bengal 36.77 106758 7.74 7.89 3.78 4.63
13 Jharkhand 58.15 22338 14.46 16.19 - -
14 Orissa 52.30 18392 10.07 10.41 7.58 9.46
15 Chhattisgarh 43.22 10524 10.12 8.95 - -
16 Madhya Pradesh 71.93 39479 15.18 15.38 22.20 22.41
17 Gujarat 70.51 202678 21.05 23.25 19.14 21.48
18 Daman & Diu 65.55 17955 18.17 11.57 17.55 9.53
19 D & Nagar Haveli 66.53 15288 13.05 12.21 23.01 17.87
20 Maharashtra 63.19 246967 19.71 22.01 21.11 22.66
21 Andhra Pradesh 27.19 103256 9.58 8.24 8.21 8.34
22 Karnataka 62.33 106755 22.62 17.88 18.63 19.64
23 Goa 73.43 10978 27.94 23.27 28.02 21.79
24 Kerala 51.90 91527 7.97 9.25 7.54 7.01
25 Tamil Nadu 62.10 333611 19.99 17.79 18.14 15.89
26 Pondicherry 61.90 7322 19.04 16.62 13.74 13.19
--------------------------------------------------------------------------------
All India 62.10 1805478 21.41 20.52 20.52 20.31
Public 53.32 20403 9.36 14.84 5.97 7.99
Joint 55.40 20504 19.51 22.08 15.04 12.59
Private 62.23 1764572 21.58 20.57 20.87 20.67
--------------------------------------------------------------------------------

16. States by Sectors during the Year 2000
--------------------------------------------------------------------------------
Sl. State Percentage of Accession Percentage of Separation
No. by Sectors by Sectors
---------------------------- ----------------------------
Pub. Joint Pvt. Overall Pub. Joint Pvt Overall
--------------------------------------------------------------------------------
1 2 3 4 5 6 7 8 9 10
--------------------------------------------------------------------------------
1 Jammu & Kashmir 2.28 - 34.00 31.70 9.12 - 32.86 31.11
2.Himachal Pradesh30.79 4.91 33.72 31.40 21.58 6.85 30.50 28.32
3 Punjab 7.96 22.45 48.98 48.89 7.96 4.08 43.18 43.09
4 Chandigarh - 36.36 27.97 27.74 23.53 - 26.94 26.84
5 Uttaranchal 6.23 8.26 17.41 16.48 8.94 13.22 17.04 16.42
6 Haryana 11.64 19.40 34.76 34.39 12.28 19.40 33.21 32.87
7 Delhi - - 25.39 25.36 - - 27.96 27.93
8 Rajasthan 1.40 15.87 28.74 27.61 2.48 10.76 26.08 25.06
9 Uttar Pradesh - 12.33 31.02 30.94 2.42 11.99 27.86 27.80
10 Bihar 5.29 28.24 23.02 22.93 4.33 4.39 17.06 16.10
11 Assam - 6.06 6.76 6.74 - 6.06 3.87 3.87
12 West Bengal - - 7.80 7.74 5.60 - 7.92 7.89
13 Jharkhand 1.47 0.38 15.43 14.46 9.90 0.38 16.79 16.19
14 Orissa 2.13 4.77 10.80 10.07 7.16 4.04 10.85 10.41
15 Chhattisgarh 35.74 - 9.54 10.12 3.83 - 9.07 8.95
16 Madhya Pradesh 0.80 4.70 15.61 15.18 1.61 2.84 15.87 15.38
17 Gujarat 84.21 - 20.67 21.05 61.38 77.78 23.02 23.25
18 Daman & Diu - - 18.17 18.17 - - 11.57 11.57
19 D & Nagar Haveli - 8.26 13.28 13.05 - 10.68 12.28 12.21
20 Maharashtra 2.35 41.28 19.17 19.71 5.43 49.20 21.29 22.01
21 Andhra Pradesh 1.95 1.45 9.73 9.58 2.08 2.99 8.35 8.24
22 Karnataka 2.29 14.25 23.01 22.62 3.49 26.19 18.04 17.88
23 Goa - 4.93 28.24 27.94 - 1.41 23.56 23.27
24 Kerala 1.94 6.79 8.25 7.97 3.62 6.15 9.62 9.25
25 Tamil Nadu 8.50 3.22 20.20 19.99 38.00 3.46 17.60 17.79
26 Pondicherry - - 19.11 19.04 - - 16.68 16.62
--------------------------------------------------------------------------------
All India 9.36 19.51 21.58 21.41 14.84 22.08 20.57 20.52

17. Present Labour Turnover Rate in
Global Scenario
• Industries with the highest turnover rates were services—
accommodation, food and drinking places (35%); arts,
entertainment and recreation (27%); and retail/wholesale
trade (22%). Industries with the lowest turnover rates
were high-tech (11%), state/local government (9%), and
association—professional trade (8%) and utilities (8%),
which were tied for third. Across all industries, the
average turnover was 15%.

18. EXAMPLE OF LABOUR TURNOVER IN
INDIAN IT INDUSTRY (CHENNAI CITY)

19. THE INDIAN IT INDUSTRY
• The Information Technology (IT) sector in India holds the
distinction of advancing the country into the new-age
economy. The growth momentum attained by the overall
economy since the late 1990s to a great extent can be
owed to the IT sector, well supported by a liberalized policy
regime with reduction in telecommunication cost and
import duties on hardware and software. Perceptible is the
transformation since liberalization – India today is the
world leader in information technology and business
outsourcing. Correspondingly, the industry’s contribution
to India’s GDP has grown significantly from 1.2% in 1999-
2000 to around 4.8% in FY06, and has been estimated to
cross 5% in FY07. The sector has been growing at an annual
rate of 28% per annum since FY01.

20. Findings From the study
• The demographic factors in the • The comparison between the
study reveals that the major working condition of employees’
respondents are male 58%, the in the organization and the work
maximum respondents belong to load of employees reveals that
the age group 20-30 years i.e., the result of the t test is not
35%, and the majority of significant to each other. Hence
respondents belongs to executive the work load and working
level i.e., 61% and the majority of condition does not coincide.
respondents experience is below
5 years and the monthly income
earned by majority of
respondents belongs to above
10,000 i.e., 33% and the majority
of the respondents qualification
belongs to undergraduate i.e.,
34% .

21. Cont..
• The comparison between the working
environment and the health & safety measures
provided to the employees reveals that the result
of the t test is not significant to each other.
Hence the work environment has no significance
over safety measures.
• The relationship between training program
provided to employees and the reasons for
leaving the organization by employees analyzed
using f test reveals that both has an equal
variation.

22. Cont..
• The relationship between the co-workers
relationship and top management personnel
was analyzed using f test reveals that both
had an equal variation. This states that both
the samples are equal variant among
themselves.

23. HR Solution on Labour turnover
• Pay problem • Adequate statistical
• Employee leaving to control
further their career • Joint control
• Employee leaving due • Use of exit interview
to conflict • Workers participation
• The induction crisis

24. Business Story
• Kwality Wall’s (Labour Turnover-WPM-
Innovation)

25. Closing case 1
Telcon (Tata- Hitachi Joint venture at Kharagpur)

26. Closing case 2
Pay revision and Turnover in Indian Army
Old Pay Scale of Indian Army

27. The armed forces, which are facing a shortage of middle level
personnel would be better placed to hire capable junior officers and
other staff.

28. Bibliography
Books-
• 1. Cost and Management Accounting, Publisher- Taxmann, Author-Ravi.M.Kishore.
• 2. Cost Accounting, Publisher- Kalyani New Delhi.
Research Papers and Articles-
• 1. Employee turnover in “IT” Industry with special reference to Chennai City-An
Exploratory Study, Mrs. E. DEEPA; Mrs. M. STELLA of Vivekanandha College of
Engineering for Women, Elayapalayam,Tiruchengode, Tamilnadu.
• 2. Article was prepared by Eliza Jacobs, strategic research analyst at SHRM.
• 3. Annual Survey of Industries, 2002-03 Vol. II Report on Absenteeism, Labour
Turnover, Employment & Labour Cost in Sample Sector, CHAPTER-III.
• Websites-
• 1. http://labourbureau.nic.in/asi2K2-3%20S%20ChapterIII.htm
• 2. - www.shrm.org