What is labor turnover and what can HR do to reduce it without harming performance?

• A. Labor turnover is the percentage of staff who leave; strategies include better recruitment fit, onboarding, recognition, development, and fair pay.
• B. Labor turnover is the amount of overtime paid; strategies include raising salaries only.
• C. Labor turnover is the number of new hires per year; strategies include stricter interviews.
• D. Labor turnover is the rate of promotions; strategies include training.

Answer: (B)

Labor turnover means the rate at which employees leave the business over a set period, usually shown as a percentage of the workforce. It matters because high turnover can be costly—there are recruitment, selection, and training expenses, plus potential dips in productivity and morale while vacancies are open.

To reduce turnover without harming performance, HR should focus on getting the right people in and keeping them engaged. This includes careful recruitment to ensure skills and culture fit, a thorough onboarding process so new staff settle in quickly, and recognition and rewards for good work. Providing ongoing development and training helps people see a future with the company, while fair pay and clear career progression give tangible reasons to stay. Supporting effective management, open communication, and a reasonable workload plus work-life balance also boosts retention. When employees feel valued, supported, and able to grow, they’re more likely to stay and perform well.

Note: turnover isn’t about overtime or paying more alone. It’s about departures; boosting salaries can help but won’t fix underlying issues like poor onboarding, limited development, or weak management.