Labour Costs

Idle time, overtime, turnover…

 Idle Time
 Productive Causes
 Waiting for work
 Waiting for tools/raw materials
 Waiting for instructions
 Power failure
 Machine breakdown, etc,
 Administrative causes: management decision

 Economic causes: non availability, fall in

demand

 Controllable : productive causes

 Uncontrollable : economic and administrative

 Overtime
 To complete work/job within specific date
 To make up time lost due to breakdown
 To work as per policy, owing to labour
shortage

 Generally, overtime is paid at a higher rate

than normal time.
 The additional amount is known as overtime
premium.
 Labour Turnover
 Rate of change in the labour force during a
specified period.

 Labour turnover may be represented by a ratio.

 Causes : avoidable and unavoidable

 Avoidable:

 Redundancy
 Dissatisfaction with remuneration
 Dissatisfaction with job
 Bad working conditions
 Relationships with supervisors, peers..
 Lack of facilities, viz. transport, accommodation,
medical, recreation and others
 Unavoidable

 Personal betterment
 Domestic reesponsibilities
 Illness or accident
 Move from locality
 Dismissal or sicharge
 Mariage
 National service
 Retirement/death
Number of workers leaving during the period
Average number employed during the period

Separation:
Number of separations during the period
Average number employed during the period

Replacement:
Number of workers replaced in a period
Average number employed during the period