Absenteeism and Labour Turnover

ABSENTISM ,LABOUR
TURNOVER
AND ITS CALCULATION
ABSENTEEISM
MEANING OF ABSENTEEISM
Employees to be present in work place as per
timings or schedule fixed for the purpose .
Deviation from the fixed time reporting: Co.s
loss
When an employee fails to report for duty on
time without prior intimation or approval, then
the employee is marked as absent.

TYPES OF ABSENTEEISM
Absenteeism is of four types:
1. Authorised Absenteeism
2. Unauthorised Absenteeism
3. Wilful Absenteeism
4. Absenteeism caused by circumstances
beyond ones control
FEATURES OF ABSENTEEISM
Rate of absenteeism
The lowest --pay day
Increases -- on the days following the payment
of wages and bonus.
Generally high among the workers
Below25 years of age
Above 55 years of age.
Rate of absenteeism varies from department
to department within an organization.
Absenteeism in traditional industries is
seasonal in character
CALCULATION OF
ABSENTEEISM RATE
Absenteeism can be calculated with the help of the
following formula:
1. Absenteeism Rate
2. Frequency Rate
3. Severity Rate
CALCULATION OF
ABSENTEEISM RATE
Absenteeism Rate
Number of man days lost * 100
No. of man days scheduled to work

Frequency Rate
Total number of times in which the leave was
availed * 100
Total number of man days scheduled to
work

Severity Rate
Total number of days absent during a period *
100
Total number of times absent during the period
CAUSES OF ABSENTEEISM

Personal Factors

Work Environment

Home Conditions

Regional Aspects

Organizational Features

Social Reasons
CAUSES OF ABSENTEEISM

Personal Factors - age, marital status, health, education, hobbies,
extra curricular activities.
Work Environment working conditions, relation with
coworkers & seniors and their attitude
Home Conditions distance from residence, mode of conveyance,
family size, family problems & responsibilities
Regional Aspects legislations, politics, geographical situations
Organizational Features type & size of company, work load,
nature of work, shift arrangements, management attitude,
personnel policies, leave facilities and medical benefits
Social Reasons religion, community obligations, customs
festivals, marriage and death
SOME MEASURES TO MINIMISE
ABSENTEEISM
Selecting the employees by testing them
thoroughly regarding their aspirations, value
systems, responsibility and sensitiveness
Adopting a humanistic approach in dealing with
the personal problems of employees
Following a proactive approach in identifying and
redressing employee grievances
Providing hygiene working conditions, welfare
measures, fair and competitive remunerations,
training and development
LABOUR TURNOVER
MEANING OF LABOUR TURNOVER

Turnover means change. A change in the financial
status of an organization is called the financial
turnover. A change in the number of employees of an
organization is called The labour turnover

CAUSES OF LABOUR
TURNOVER
Reduced quality of work

Discontinuance of business

Changed Industrial process

Seasonal fluctuations in relation to volume of
business

Industrial depression

Nature of work

CAUSES OF LABOUR
TURNOVER (Contd.)
Low wages

Poor working conditions

Less opportunities for advancement

Bad relations of workers with the management also
cause labour turnover.

Union base activities of the workers create conflict
with the management

Personal problems of employees

Change of jobs----different industry

COSTS OF LABOUR
TURNOVER

High rates of labour turnover are expensive in
terms of:
Additional recruitment costs
Lost production costs
Increased costs of training replacement employees
Loss of know-how and customer goodwill
Potential loss of sales (e.g. if there is high turnover
amongst the sales force)
Damage that may be done to morale and
productivity (an intangible cost)

ESTIMATING LTO
Every good organization prepares a report of labor turnover to refer and rectify the
avoidable causes of turnover.
Average No. = (No. of employees at start + No. of employees at end) / 2
1- Separation Method/Rate:
Number of employees separated in a period * 100
Average number of employees in the period
2- Replacement Method/Rate:
Number of employees replaced in a period * 100
3- Flux Method/ Rate:
No. of employees separated + No. of employees replaced * 100

MEASURES TO CONTROL LABOUR
TURNOVER

Analysis of the employees records &identification
of dissatisfied categories of employees by the
manager

Identification of the factors or sources influencing
turnover

Exit interviews

Separation of controllable factors from
uncontrollable factors
Provision of factory policies, procedures &
practices

Action plan to remove influencing factors

Conclusion
Absenteeism and labour turnover are connected

Absenteeism above 5 % very serious

Bad reputation of business leading to drop in
sales, lower profits, bad cash flow

Decrease in output

Drop in Market share

Struggle to compete with rival companies

Reduce absenteeism and labour turnover

Introduction of incentive plans

100% attendance awards / benefits

Friendly and healthy formal relationship within the
organisations

Involvement of employees in decision making

THANK YOU

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ABSENTISM ,LABOUR

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