Career Tips / Blog

Managing Labour Turnover and Retention Strategies

Managing Labour Turnover and Retention StrategiesManaging Labour Turnover and Retention Strategies
Spread the love

Labour, employee or staff turnover is basically a fancy way of saying how many employees are leaving your company over a certain period – the flow of people in and out of the workplace. it is a bit like that revolving door at the entrance of a fancy hotel – people come, people go, but ideally, you want to keep the flow steady and manageable.

“Labour turnover can be defined as the overall change in the number of people   employed in a business entity during a particular period” –

A bit of movement among employees is pretty normal because people switch jobs for all sorts of reasons – maybe they found a better opportunity or decided it’s time for a change. Other times, it’s professional – dissatisfaction with the job, feeling undervalued, or not finding the right fit within the company culture. But when lots of employees start leaving, it’s like a red flag waving. That could mean something’s not quite right within the workplace.

Types of Labour Turnover:

Labour turnover can be categorised in different ways. The most common approach is to divide employee separations into ‘voluntary’ and ‘involuntary’ or ‘employee initiated’ versus ‘employer initiated.’ One can also classify labour turnover as ‘avoidable’ and ‘unavoidable’.

•             Involuntary Turnover: This is when an employee leaves an organization because the company let them go, maybe due to downsizing or restructuring.

•             Voluntary Turnover: Here, employees leave the Company on their own terms – resignations or retirements etc.

Then there’s the ‘avoidable‘ and ‘unavoidable‘ stuff:

  • Avoidable Turnover: This happens when people leave because they’re not happy with something at work, like their boss, below average working conditions, absence of health and safety measures, conflict with supervisor or co-workers, dissatisfactory wages and allowance, the company culture, or opportunities for growth

•             Unavoidable Turnover: Sometimes, it’s out of the company’s hands – like if someone has to move for personal reasons or due to misconduct of employees, health reasons, illness, retirement, accident, death, health, domestic issues, community issues etc.

Managing Labour Turnover and Retention Strategies
Happy Employees

Effects of Labour Turnover

High labour turnover could have negative effects like:

  • Lower/ decreased productivity,
  • Interruption in the production process
  • Decline in morale.
  • Loss of time between employee exit and replacement
  • Wastages & rejects thereby increasing cost of production
  • Lower efficiency in new workers thereby increasing cost of production
  • Huge financial cost on hiring and training new employees and
  • Losing out on the skills and knowledge departing employees had.

This can also hurt businesses when there’s high labour turnover and can throw things out of proportion – projects may get delayed, and morale could take a hit etc.

We must not always look at the negative effects of labour turnover. It can impact positively on a company. For instance:

  • New employees can bring fresh ideas and skills that can improve overall performance to the organisation.
  • New hires could be got at a lower cost/ rate
  • It could lead to recruitment of better talents,
  • wholistic review of the organization’s modus operandi and culture etc to reflect modern trend.

Labour Turnover Calculation

To understand your labour turnover rate, you need to know:

  1. How many people left during the period.
  2. How many employees you had at the start of the period.
  3. How many employees you had at the end of the period.


Annual and monthly turnover can be calculated using the same formula but with different inputs.

Here is an example of a yearly turnover calculation: 

Labour Turnover No. of Employees who left  x 100                                                                                       Average No. Employed

Company XYZ manufactures soap. In 2023 Company XYZ employed an average of 70 staff. Same year the company hired 12 staff to replace 15 that left.

Company XYZ has a 21.4% labour turnover rate.

To calculate the monthly turnover rate, you will have to apply monthly numbers instead, i.e. the number of employees who departed during the month, the number of employees at the beginning of the month and end of the month.

So, there you have it – labour turnover demystified, without all the jargons!

As an employer, it’s essential to understand why people leave and what you can do to encourage them to stay. Here are a few human-centric strategies to consider:

Build a Culture of Appreciation: People want to feel valued and recognized for their contributions. Take the time to acknowledge their efforts, celebrate achievements, and create a supportive environment where everyone feels like they belong.

Invest in Development: Offer opportunities for growth and learning. Whether it’s through training programs, mentorship, or career advancement paths, show your employees that you’re invested in their personal and professional development.

Promote Work-Life Balance: Burnout is real, folks. Encourage a healthy balance between work and personal life by offering flexible schedules, remote work options, or additional benefits like wellness programs or paid time off.

Listen and Act: Communication is key: Take the time to listen to your employees’ concerns, feedback, and ideas. Then, don’t just nod along – take action. Show them that their voices are heard and that their input matters.

Offer Competitive Compensation and Benefits: Let’s be real – fair pay and perks matter. Stay competitive in your industry by offering competitive salaries, comprehensive benefits packages, and perhaps even some enticing perks that make your workplace stand out.

Create Opportunities for Connection: Building strong relationships among team members can help foster a sense of belonging and loyalty. Encourage social activities, team-building exercises, or simply provide spaces for people to connect and bond.

Employee Retention Strategies

Some strategies to retain your best talents:

  • Hire right
  • Ensure that your salaries are internally equitable and externally competitive;
  • Implement quality supervision and management
  • Provide performance feedback
  • Develop equal opportunities policies
  • Promote career progression opportunities
  • Effective onboarding
  • Recognition and reward
  • Review at intervals your recruitment and selection policies to reflect current Company thinking
  • Monitor competitors to be ahead of them in your people management
  • Improve and offer quality training and education to employees
  • Build employee engagement
  • Provide employees tools for success
  • Offer better choice benefits to employees
  • Improve job designs and also introduce flexible working practices


In wrapping up, labor turnover isn’t just about the numerical shifts in staffing; it’s about the dynamic movement of individuals within a company, influencing its atmosphere, efficiency, and ultimately, its prosperity. By grasping the full scope of labor turnover, businesses can not only tackle obstacles but also leverage opportunities for advancement and creativity, recognizing that their workforce is truly their greatest asset.

Written by Agolo Uzorka Eugene, CEO/ Lead Consultant, Eugene + George Consulting Limited

Agolo Uzorka
Agolo Eugene Uzorka
Agolo Uzorka
the authorAgolo Uzorka

Leave a Reply