6.2 - Analysing human resource performance Flashcards
What is labour turnover and how is it calculated?
Labour turnover refers to the percentage of staff that leaves the business per year. Retention refers to the percentage of staff that stays at the business per year.
Labour turnover = (Total number of staff leaving ÷ Average number of total staff) × 100
Advantages and disadvantages of low staff turnover.
Advantages:
Low staff turnover means that experienced employees remain within the business.
Low staff turnover means that training and recruitment costs are low as there are fewer vacancies to be filled.
Disadvantages:
Low staff turnover means that there are fewer opportunities for the business to recruit new talent, skills, and ideas.
What is labour retention and how is it calculated?
Percentage of employees staying in the business. When labour turnover is high, the number of employees leaving the business is high, which means that retention, the number of employees choosing to stay at the business, is low.
(Total number of staff who worked at a business for the whole period of time ÷ Total number of staff at the beginning of the period of time) × 100
Why does HR use Labour productivity?
Labour productivity is a measure of the units produced by an employee in a given period of time. HR managers use this as a measure of an employee’s performance during appraisal reviews to inform decisions about employee pay and any possible training requirements.
How do you calculate employee costs? and why is this beneficial.
Calculating employee costs as a percentage of turnover allows HR managers to assess, as a proportion of total revenue, or turnover, the amount that is spent on staffing costs.
Employee costs as a percentage of turnover are expressed as a percentage and are calculated using the following formula:
Employee costs as a percentage of turnover = (Total employee costs ÷ Total revenue) × 100
What is labour cost per unit and how is it calculated?
Labour cost per unit allows a business to calculate the cost of labour for every one unit produced.
Labour cost per unit = (Total labour costs ÷ Total units produced)
