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Dear sir,
At the start of the year company had 3200 employed. During the year 1720 workers left the company. At the end of the year there were 2,000 workers employed.
What is the labour turnover rate.The correct solution of this answer as per the mock exam solution is
number of replaced workers/average number of employees.
520/2600 =20%I don’t understand why we did we use the number of replaced workers and not the number of leavers (1720-520=1200 leavers)?
Thank you.
The turnover rate is looking at how many employees are leaving the company because they do not enjoy working at the company, not how many leave because (for example) the company is losing money and therefore having to dismiss workers.
Ideally a company would want their workers to stay with them (assuming that they were not needing to reduce the number of employees), in which case the turnover rate would be zero.
The higher the turnover rate then the more they should worry that employees are not happy working for them.
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