Measurements
- Labour productivity
- Output per employee
- Staff Turnover
Employee retention
- All businesses loose staff
- Natural causes (illness, death)
- Changes in strategy
- Closing a branch
- Bad management or conditions
- If people are unhappy with the conditions of the job they are more likely to leave
Absenteeism
An employee’s intentional or habitual absence from work.
- A significant business cost
- Sickness costs around £600 for each worker per year
Formula
Number of staff absent during period / Number employed during period
x 100
Alternative Formula
Number days taken off for unauthorised absence(during period) / Total days worked by workforce over the period
x 100
Worked example
Working days : 4000 Unauthorised Absence: 560
560/4000 x 100 = 14% ∴ Absenteeism = 14%
Practice Exercise 1
- Rate of inflation
- 190 workers, 178 employed by EOY and 24 workers left. 24/190 * 100 = 12.6%
- 6300 workers per year, 2700 for 1+ years. Retention. 42.8% retention.
- Labour productivity indicates how much output is produced for the size of the workforce. If a business has a very high labour productivity, then it means that each employee, on average, will produce a relatively high volume of goods over a specific time period. Labour cost per unit, on the other hand, indicates how much labour costs to produce a single unit. If labour productivity is high, then the labour cost per unit will decrease, as each person will be producing more over a time period.
- By providing workers with more benefits, they can ensure that motivation levels are increased, meaning that people will work harder, decreasing the labour cost per unit and thereby increasing labour productivity.