CA INTERMEDIATE: COSTING & FM · EMPLOYEE COST

Labour turnover: separation, replacement and flux methods

Average workers = (opening + closing) ÷ 2. Separation = separations ÷ average × 100; Replacement = replacements ÷ average × 100; Flux = (separations + replacements) ÷ average × 100.

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Worked examples

Example 1 · level 1

Mehta Polymers had 1060 workers at the start and 1056 at the end of the year. 10 workers left and 6 were recruited as replacements (no new posts were created). Find the labour turnover rate by the separation method (%).

Show solution
  1. Average workers = (1060 + 1056) ÷ 2 = 1,058.
  2. Rate = 10 ÷ 1,058 × 100 = 0.95%.

Answer: 0.95 %

Example 2 · level 2

Mehta Polymers had 420 workers at the start and 416 at the end of the year. 14 workers left and 10 were recruited as replacements (no new posts were created). Find the labour turnover rate by the replacement method (%).

Show solution
  1. Average workers = (420 + 416) ÷ 2 = 418.
  2. Rate = 10 ÷ 418 × 100 = 2.39%.

Answer: 2.39 %

Example 3 · level 3

Gupta Auto Parts had 220 workers at the start and 220 at the end of the year. 13 workers left and 13 were recruited as replacements (no new posts were created). Find the labour turnover rate by the flux method (%).

Show solution
  1. Average workers = (220 + 220) ÷ 2 = 220.
  2. Rate = 26 ÷ 220 × 100 = 11.82%.

Answer: 11.82 %

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