6.2a Analysing HR performance Flashcards
Labour turnover definition
The percentage of the workforce that leave a business within a given period (usually a year)
Labour turnover formula
Labour turnover = (number of employees leaving during period ÷ average number employed during period) x 100
Advantages of staff leaving
- New people with fresh ideas
- Hire specialists rather than training existing employees
- Already trained by competitors
Disadvantages of staff leaving
- Increases recruitment costs
- Reflects poor morale in workforce
- Increases training costs
Retention rate formula
(Number of employees with X years service ÷ overall workforce numbers) x 100
Retention rate definition
Proportion of employees with a specified length of service
Methods of improving retention
- Recruit correct staff
- Train staff
- Exit interviews
Labour productivity definition
Amount of output obtained from each employee
Labour productivity formula
Labour productivity = output per period ÷ number of employees at work
Two methods of reducing labour costs per unit
Increasing output for the same level of labour costs
Reducing labour costs for the same level of output
Ways to achieve lower labour costs per unit
- Recruitment of skilled workers
- Training of existing staff
- Outsourcing
What does employee costs as a % turnover show?
How much of the money the business makes from sales that is taken by employee costs
Employee costs as a % turnover formula
Employee costs as a % turnover = (employee costs ÷ revenue) x 100
