6.2 Analysing human resource performance Flashcards
How to calculate labour turnover
(total number of staff leaving / average number of total staff) X 100
Why could there be a high labour turnover
- if competitors offer higher wages and salaries
- if employees are demotivated
Advantages of low staff turnover
- experienced employees remain within the business
- training and recruitment costs are low as there are fewer vacancies to be filled
Disadvantage of low staff turnover
Fewer opportunities for the business to recruit new talent, skills and ideas
How to calculate retention rates
(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) X 100
A cause of high retention rates is
- the business pays a higher salary or wage than its competitor - employees are motivated, empowered and valued
How to calculate labour productivity
Total output / total number of employees
Why does calculating labour productivity benefit HR managers
They may reward employees if productivity is increasing, though may plan training for employees if productivity is decreasing
Why does calculating employee costs as a % of turnover allow HR to assess
the amount that is spent on staffing costs
How to calculate employee costs as a % turnover
(Total employee costs / total revenue) X 100
How to calculate labour cost per unit
(total labour costs / total units produced)
importance of labour costs per unit
- HR managers can compare data to previous years, to competitors and to the wide industry
- if HR managers are unhappy with their current labour cost per unit, they may decide to increase productivity, so that employees produce more, or they may reduce employee costs
How to improve labour costs per unit
Increasing productivity or reducing employee costs
