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ACCA Applied Knowledge · Business and Technology · Consequences of ineffectiveness at work

A software firm loses several experienced developers within a year because of ineffective management. Which of the following is a consequence for the organisation that is specifically linked to high labour turnover?

Recruitment and training costs rise and organisational knowledge is lost. Replacing departing developers requires advertising, selection and induction, and their skills and experience leave the firm. This is the typical cost of high labour turnover caused by ineffective management.

  1. ARecruitment and training costs rise and organisational knowledge is lostCorrect
  2. BEmployees automatically become more loyal to the firm
  3. CTax-deductible expenses for the firm fall to zero

Explanation

Leavers must be replaced, which brings recruitment, induction and training costs, and their experience and client knowledge leave with them. Remaining staff do not become more loyal because of turnover, and expenses do not fall to zero.

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