How to Calculate Labor Turnover

To calculate Labor turnover is important for organisation because it completely affects labor costs. This means, % of labor changes after a certain time or be replaced by company. Both things increase labor costs. Repeatedly leaving the job by the labor, accidents, deaths of labors, labor retrenchment are the main examples of labor turnover. So, it decreases the level of production and also production is delayed. It also increases the cost of production.

So, for controlling it, we calculate the percentage of labor turnover by applying following steps

First :  Calculate Average No. of Employees during a period

First of all you have to calculate average number of employees during a period. It can be calculated by totaling of no. of employees in the beginning of year and no. of employees in the end of year and then divided by 2. Employees in the beginning of year can be found by checking of labor registers and employees in the end can be found through physical verification.

Second : Determination of Changes in Labor

After taking first step, following second step should be taken:

a) To find the employees who left the organization.

b) To find the employees who are required by organization.

c) To find the employees who are the newly appointed in the year.

Third : Apply the suitable formula of Labor turnover

Following are the main methods for calculating the labor turnover. You can use any best formula by using any one method in your organization.

Ist method

Labor turnover with separation

= No. of employees left during the period / Average no. of employees during the period X 100

2nd Method Labor turnover with flux

= number of required employee + no. of employee left the job / average number of employee X 100

3rd Method labor turnover with Optimum

= number of required employees + number of employees left the job/2 / average number of employees X 100

4th Method Labor turnover with replacement

= number of employees appointed newly / average number of employees X 100

For Example

From the following information, calculate the labor turnover rate

a) With separation method
b) With flux method
c) With optimum method
d) With replacement method

Number of workers at the beginning of year = 3800

Number of workers at the end of year = 4200

During the year 40 workers left while 160 workers are discharged. 600 worker were required during the year, of these 150 workers are recruited because of leavers and rest are engaged in accordance with an expansion scheme.

Average number of workers during the year = 3800 + 4200/2 = 4000

a) With separation method

LTR = 200/4000 X 100 = 5%

b) With flux method

LTR = 150 +200 / 4000 = 8.7%

c) With optimum method

LTR = 150 +200 /2 / 4000 X 100 = 4.3%

d) With replacement method

LTR = 150/4000 X 100 = 3.75%






access account accountant Accounting accounting definitions accounting ebook Accounting education accounting procedure accounting process outsourcing Accounting Software advance advertising africa Amalgamation amendments announcements Annuity assets audit auditing Australia B.Com. balance sheet bank Bank reconciliation banking basic accounting BBA benefits best bill black money blog bloggers book keeping bookkeeping Branch Accounting - full tutorial budget Budget variance business businessman CA calculator canada capital capital budgeting career cash cash book cash flow statement Chiense children china class coaching coins college commerce commerce students company computer computer accounting conference Contact vinod kumar Control Your Spending corporate accounting cost cost accounting cost center cost centre CPA credit credit card cs currency data Debit and credit debit cards debt debtor degree depletion depreciation Diwali Messages documents dollar domain Downloads Dubai e-accounting earning education Education Loans email employee EPF ERP euromoney examination excel excise duty expenses facebook factor of loan fans feature fifo FII fiji finacle finance Finance Journal Entries Financial financial accounting fire insurance flickr flow forensic forex formula france fraud free fun function fund GAAP GDP gdr germany gold goodwill goodwill accounting google google apps Google Adsense google apps google base google buzz google calendar Google docs google finance google fusion tables google talk govt. GST guide health Hindi Hindi Language history holding company How to treat FBT in Tally 9 HRA ICAI ICAWI ICICI Bank IFRS income income statement Income Tax India indian railway Indonesia inflation inflation accounting infographics information inspiration insurance insurance accounting Intangible interest international Internet Introduction of Tally 9 inventory investment investment in Shares invoice IT Japan Job costing journal entries Journal Entries eBook Help Kalculate keyboard kindle kuwait laptop law LBT learning lease lecture ledger leducation Leverage Analysis liabilities lifo linkedin loan logical point loss loss of profit M.Com. m.phil malaysia management accounting manual accounting manufacturing account market marketing mastercard material MBA MCA media migration mobile money ms word ms. excel multi currency in tally 9 Multicurrency Accounting mutual fund national security new and sacrifice ratio new york times new zealand news NGO nonprofit-accounting North Georgia Mountains NPV NSE odbc office oman online application online accounting Online Accounting Course otcei pakistan parents Partnership pay pal pdf Personal Finance pie chart pie chart of income pnb podcast ppf presentation price privacy policy prize money prof. vinod kumar profit profit and loss account project management provision purchase puzzles quickbooks Quote quotes quotes of svtuition rating agency ratio analysis RBI readers real estate rectification of errors remote control reports reserves responsibility accounting retirement revenue Revenue reserves review risk rupees salary sale saudi arabia saving sbi scholarship school SEBI security service tax share share trading Shares shri lanka singapore sms social accounting society solution South Africa stock stock exchange structure student students study subsidiary company svtuition swiss bank tally tally 9 Tally 7.2 Tally 9 Tally.ERP 9 tanzania tax Tax Accounting TDS teacher teaching technology test testimonial testimonials thailand tips trading trading on equity transaction trend trial balance truthfulness tuition twitter UAE UGC - NET Commerce UK United Arab Emirates university usa valuation VAT Video Voucher and vouching Wealth wikipedia working capital youtube
Accounting Education: How to Calculate Labor Turnover
How to Calculate Labor Turnover
Accounting Education
Not found any lecture VIEW ALL Continue reading Reply Cancel reply Delete By Home PAGES Lectures View All RECOMMENDED FOR YOU Category ARCHIVE SEARCH ALL Lectures Not found any lecture match with your request, please help to write it and send it to our email at for making this website free accounting and finance encyclopedia. Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock