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In which case turnover costs in a company are high?Explain it.

In which case turnover costs in a company are high?Explain it.

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Answer #1

Turnover ratio is the number of employees which left during the year divided by the total number of employees at the beginning of the year. Now turnover cost is the cost spent on these employees. Higher the employee turnover higher the cost. Hence the comoany tries to keep their employees motivated and satisfied.

Cases when turnover cost is high :-

  1. High rate of employees turnover - If the employees will leave the company in short period than company has to bear certain cost to the train new employees and also it lowers the morale of other employees too.
  2. Hiring cost - It includes interview cost, recruiting cost and post interview cost.
  3. Training cost - It is time consuming and costs high to the company.
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