High labour turnover danger to business
Published On February 4, 2014 » 4008 Views» By Davies M.M Chanda » Business, Columns
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SME cornerIN this week’s column, we take a look at the labour turnover being experienced in the business entities, run by Small and Medium Enterprises (SMEs) entrepreneurs.

Labour turnover in simplicity terms can be equated to the high frequency of workers joining and leaving the particular work place within a specified period of time for example, in a year.

I have been prompted to write on this subject particularly on SMEs out of the experience that has come to me by way of witnessing the exodus of employees from various work places particularly in the SMEs sector.

It must be appreciated that labour contributes significantly to the well being of businesses being run not only by individuals even by incorporated companies run by several shareholders with the wide spread of branches.

Well-established companies with proper working business structures and run by several share holders, have put in place a well be fitting labour policy for workers, which sees employees remunerated handsomely with proper pension scheme and a wide range of fringe benefits such as holiday allowances, sick benefit schemes, housing allowances, education allowances sharing the profits of the company in one way or another just to appreciate the contribution made by the employees.

While this country appreciates the entry into a liberated economy which has seen the coming on the scene of private companies run by brilliant individuals with brilliant business ideas, less has been seen in rewarding workers who have helped these individuals become millionaires today.

While an employer is expectant of maximum input from a worker to propel the business to the next stage, little has been done to remunerate the worker correspondently.

Most employers in the category of SMEs define a salary as a final remuneration in a month and this is despite of any increase in the volume of business sales which can be attributed to the hardworking workers.

And to make matters worse, such workers are subjected to poor working conditions.

Such conditions are the working hours that go over given hours as stipulated by the Ministry of Labour and international labour organisation (ILO).

And if a worker raises the voice of concern over the harsh working conditions, the next course of action taken by the employer is dismissal.

These conditions of work have contributed to the high labour turnover.

One such industry where there is high labour turnover is the motor industry. The longest a worker can stay on a job in this industry is two years.

At one time when I was consulting with a firm in this industry the workers approached me and cried for the help and this help was that they needed loans from the banks where they were receiving there salaries.

With so many employees in this country benefiting from personal loans from various banks which has seen most of them build personal houses and buy personal cars, I thought it wise to help them in this area.

However, when I approached the bank with such a proposal, I was shocked when the loan officers told me that it was not possible for the bank to extend such facilities to workers in the motor industries because of high labour turnover and non existence of pension benefits.

I witnessed an incidence where one business owner instructed the manager to reduce the work force just because he could not enforce the minimum wage but two months down the line he employed the same number of the employees just as those who where laid of.

Workers in the SMEs sector are insecure with their jobs and if one had to visit the labour office will be amazed at the queue for submission of complaints and the claims for the benefits from these employers.

As most of you who are familiar with business running are aware that in the production industries such as the manufacturing sector, raw materials and labour are inseparable in the production mix of end products, but it is amazing how some business owners have attached great importance to the procurement of materials with less regard to labour.

Other employers sacrifice labour and sometimes workers can go for several months without being paid and this brings a lot of strife in the work place contributing to high labour turnover.

A well groomed staff in a work place becomes an asset to a business and their contribution must always be acknowledged by the business owners.

Incentive creation in the work place must be encouraged as this is one way of appeasing workers.

SMEs should learn to invest in labour as part of business investment because as you must be aware, investments are associated with returns.

A good investment yields good returns so is investing in good workers.

High labour turnover is a danger to a business because the growth of a business will be affected in one way or another.

So let SMEs learn to invest in labour and put up a policy of labour retention.

Comments: 0950458228 or wklpublications699@gmail.com

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