Simulation 2. Labour Turnover

Labour Turnover  =

Number of staff having left in a given period (usually 1 year)

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The average number of staff employed over this period

This is usually expressed as a percentage.  For example:

1. if 10 staff leave out of an average of 100 => 10% labour turnover rate
2. if 10……………………………………..     200 =>  5%

The issue is that although some labour tournover is acceptable (some might even be desirable to introduce fresh ‘blood’ (contacts, ideas, contracts, expertise etc), too much turnover suggests a real problem at the heart of an enterprise that is not simply going to be cured by replacing the leaver (unhappy, poor-performing staff).

In Tourism, labour turnover is often higher than in other industries for a variety of reasons:

• seasonality – some businesses are not open all year
• relatively low pay (often because of seasonality!)
• unsociable hours
• jobs viewed as a ‘stepping stone’ to something better or a part-time rather than full-time job
• lack of training investment (again seasonality plays its part in this)
• lack of possibility of advancement

Now here is the ColmarCo problem for you to address in the form of a memo from your MD / PDG to you as the senior management team responsible for Human Resources Management, and therefore for Recruitment, Selection and Retention: