Effect of Labour Turnover on Cost



The Labour Turnover in excess of normal rate is high turnover, and the turnover below the normal rate is low turnover. It is always better to keep the turnover low, but it should nto be construed that the factories with low turnover are always more productive. There may be low turnover in a factory for the reason that the workers engaged therein are below standard and so they cannot find better place in other factories. Secondly, low turnover in the senior scales may not provide promotion factories. Secondly, low turnover in the senior scales may not provide promotion opportunities to the young and promising employees and so they may like to shift to other factories for better prospects.


A high turnover has an adverse effect on the cost of production due to the following reasons:

  1. Change in workers interrupts production and the production goes down.
  2. New comers take time in learning the factory procedure and the work procedure.
  3. The tools and machines cannot be handled as efficiently by the new workers as hither to done by the old staff. There are chances of more break-downs and of greater cost of repairs of machines.
  4. What is true of machines is also true of material handling and usage by the new workers.
  5. The rate of accidents may increase, the rate of defectives in the finished output may increase, and there may be increased wastage of time.
  6. The cost of making selections and cost of imparting training to the new entrants would further increase the cost and reduce the profits.
The following two tabs change content below.
We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to [email protected]

Leave a reply

BMS.co.in is aimed at revolutionising Bachelors in Management Studies education, also known as BMS for students appearing for BMS exams across all states of India. We provide free study material, 100s of tutorials with worked examples, past papers, tips, tricks for BMS exams, we are creating a digital learning library.

Disclaimer: We are not affiliated with any university or government body in anyway.

©2020 BMS - Bachelor of Management Studies Community 

A Management Paradise Venture

Ask Us On WhatsApp

Log in with your credentials


Forgot your details?


Create Account