6.2a - Analysing HR Performance Flashcards
Labour turnover definition
The percentage of the workforce that leave a business within a given period
Labour turnover formula
(no. of employees leaving / average no. of workers) X 100
Reasons staff leave:
- Retirement
- Unsuitable for job
- Employee does not like work
- Changes in business strategy
Advantages of staff leaving:
- Can hire new people with new ideas
- Hire specialists rather than training existing employees
- Can hire someone already trained by competitors
Disadvantages of staff leaving:
- Increased recruitment costs
- Poor morale in workforce
- Increased training costs
- Less productive
Retention rate formula
(no. of employees with X years service / overall workforce numbers) X 100
Retention rate definition
The proportion of employees with a specified length of service
How can a business improve retention?
- Recruit correct staff
- Train staff
- Exit interviews
What incentives can be given to employees?
- Bonuses
- Wage rises
- Promotion
- Flexible working
Labour costs per unit definition
How much is spent on labour to produce one unit of output
Labour costs per unit formula
Total labour costs / total units of output
How can a business reduce labour costs per unit?
- Recruit skilled workers
- Train existing staff
- Increase motivation
- Better capital equipment
- Outsourcing
Employee costs as a % turnover formula
(employee costs / revenue) X 100
Employee costs as a % turnover definition
How much of the money made from sales that is taken by employee costs
