LABOUR TURNOVER

Abstract

After almost two decades of uninterrupted growth, domestic labour resource m Singapore has become a scarce and valuable commodity through the rapid expansion of economic activity. With the tightening of the domestic labour market, the issue of labour turnover naturally becomes a germane concern for human resource managers and the government's policy makers. Moreover, the Singapore economy is in a process of advancing toward the next stage of economic development and emphasis on growth is gradually being shifted towards productivity rather than resource mobilisation. This issue on labour turnover thus possesses an added significance as it has direct consequences on productivity. This paper pursues a general objective of attempting to gam a better understanding of labour turnover and turnover behaviour. A dual approach consisting of an empirical study and a theoretical analysis is adopted. In the empirical study, I will perform an aggregate analysis on labour turnover in Singapore. In this study, we observe how aggregate employment data may be employed to elucidate the profile of turnover pattern for the domestic active labour force. In the theoretical analysis, I model the individual's perspective on job stability to explain turnover behaviour. The fundamental result from this study is that turnover is a rational behaviour, consequence of the individual's utility maximisation in an ongoing process of job-search. Applying the same concepts, the model provides logical explanations to various phenomena of turnover, several of which were established in empirical study itself. Through this amalgamation of empirical findings and theoretical explanation, I hope to shed new light on the field of understanding labour turnover. Finally, the model also offers a useful alternative framework to analyse turnover research.