Labour Turnover Rate

The very first and one of the most important part of ‘HRP’ is forecasting future demand for HR. Forecasting demand plays a significant role for any organisation. Every organisation has certain goals to achieve and in order to meet the targets they need skilled workforce to work for them. In this process varies job roles are considered such as the predicted number of jobs, type of jobs such as full time or part time, required skills and working ability for the proposed job role etc.

On the other hand, supply plays major role in obtaining any business objectives.

It basically focuses on the redundancy and the recruitment of the employees within any organisation. Some basic quantitive methods are used In order to forecast supply which is given here: Labour Turnover Rate (also called Wastage Index) Number of Leavers per period x 100 Average number of employed during that period However this method faced some difficulties. Thus, lead to a new method in 1974 which is called the stability index.

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Stability Index

Number of Employees with one or more year’s service x 100 Number employed one year ago Both of the methods are used to help increase the overall company performance. While applying these methods company considers working environment focuses on different issues about people working in, such as what sort of job is available, how the characteristic of employees should be, avaibility of the required people internally and externally etc.

Moreover , it is very important for Human Resource Planner to know exactly what is the demand for the company and the supply of employees he can provide in order to achieve certain objectives.

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Therefore, the whole function develops overall company performance and increases the accuracy in forecasting demand and supply. While determining the demand of the company any Human Resource department would have to keep in mind and be concerned about the probability of internal and external supply of manpower.

Internal supply basically means to look for your desired workforce within the organisation. For example, a new job role has taken place in the company and the management is looking for someone who has got certain job experience and skills. Most often it’s cost effective and lot easier to look for employees internally. This internal supply can be done through collecting data about employees job skill, qualification, performance related audits and managerial reviews.

Forecasting external supply draws an idea of perceiving the recruitment and maintenance effects on workforce and such factors usually cover these areas: > Demographic models and patterns > Unemployment levels > Developing varies economic, social, educational aspects. > Evaluate the local and national pay policies and plans of other individual employers. Human Resource Variants: Human Resource Planning has got some variants as well. They are actually used by human resource planning department whenever they need according to their business environment.

For example Micro Planning is used to make predictions about near future, Contingency Planning is used as a backup in case of the failure of any business strategy, Succession Planning refers to identify reasons or to establish logical planning, skill planning vastly used to figure out exact job skills and forecasting what may be the requirement for a particular job role and the last variant is mentioned as Soft Human Resource Planning. Human Resource Management is the essential part for any company.

The actually design of it is based on the overall development system of any company to increase internal and external company efficiency, enhance performance of the workers and to meet objectives. Perhaps, we can infer that the principle of human resource planning is to make sure that the right persons are at the right place at the right time. However, a big challenge for Human Resource Planning is to focus on the requirements of company and to manage its workforce in an organised way. Because according to Rothwell ‘HRP’ was unfavourable for large companies as it is been used on a smaller scale.

Moreover, according another statement it is unfeasible to make accurate assumptions about the demand and supply using HRP, although the perceptions were made based on some previous practice and emphasized the fact that future could be unpredictable for any organisation. (Cited by Taylor, 2002).

Indeed, Human Resource Planning plays a significant role in obtaining human resource strategies. The success and performance of the company entirely depends on the important factors such as its employees and how the existing man power is operated within an organisation. Human resource planning is a key pratice which can improvise any companies and employees activity and lead them to prosper in future.

BOOKS: Taylor, S. (2002) People Resourcing, 3rd edition, London, Chartered Institute of Personnel and Development  Dowling, P. J. and Schuler, R. S. , (1990), International Dimensions of HRM, Boston: PWS- Kent.  Holden, L and Beardwell, I. , (2001), Human Resource Management A contemporary approach, Ed 3rd, London: Prentice Hall  Edwards, T & Pinnington, A. , (2000), Introduction to Human Resource Management, New York: Oxford University Press

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Labour Turnover Rate. (2020, Jun 02). Retrieved from

Labour Turnover Rate

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