1.       Describe the internal labor market of the company in terms of job stability (staying in same job), promotion paths and rates, transfer paths and rates, demotion paths and rates, and turnover (exit) rates.

2.       Forecast the numbers available in each job category in 2008.

3.       Indicate potential limitations to your forecasts.

Solution

A)           The 2005-2006 transition probabilities provided indicate the following:

Sales Full (SF) Time:

1.         50% stayed the same.

2.         10% transferred to part-time status.

3.         5% were promoted to Asst. Sales Mgr (ASM).

4.         0% were promoted to Regional Sales Mgr (RSM).

5.         35% left the organization

Sales - Part-time

1.         5% transferred to full-time status.

2.         60% stayed the same.

3.         10% were promoted to Asst. Sales Mgr (ASM).

4.         0% were promoted to Regional Sales Mgr (RSM).

5.         25% left the organization

Asst. Sales Mgr.

1.         5% were demoted to full-time sales.

2.         0% were demoted to part-time sales.

3.         80% stayed the same

4.         10% were promoted to Regional Sales Mgr.

5.         5% left the organization

Region. Sales Mgr.

1.         0% were transferred to another job.

2.         70% stayed the same.

3.         30% left the organization 

B)                     The numbers available in each job category in 2008

Workings :

Sales Full Time:     Sales Part Time              ASM                        RSM

50% *500 =250           5% *150 =7.5         5% *50 =2.5         70% *30 =21

10%.*500=50              60%.*150=90         80%.*50=40          30% *30 =9

5%*500=25                 10%.*150=15          10%.*50=5

35% *500=175                          25% *150=37.5        5% *50=2.5 

C)         Limitations to your forecast

• Sample size is important to draw relevant conclusions. Some cells contain less than 20 cases thus estimates based on these figures will tend to be unstable.
• There is a possibility of some misrepresentation of the results due to multiple moves by employees which this analysis cannot detect. Might end up with unexpected vacancy due to interim position as it does not take into account movement in between time T(beginning)and T+1(end).
• The forecast of availabilities assumes that all employees in a category have the same probability of movement. In addition, these probabilities cannot explain why movements occur. This is inaccurate as employee movement probability varies based on other factors.