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Gallagher HR Estimator &
Cohort Analysis
Dr. G C Mohanta, BE(Mech), MSc(Engg), MBA,PhD(Mgt)
Professor
Al-Qurmoshi Institute of BusinessManagement, Hyderaad - !""""!
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#aour $urno%er
The analysis of numers of !eo!le lea"ingorgani#ation !ro"i$es $ata for use in su!!lyforecasting,
Calculations can e ma$e on the numer of
!eo!le lost %ho may ha"e to e re!lace$. The analysis of the numers of lea"ers an$ the
reasons %hy they lea"e !ro"i$es information
&t %ill in$icate %hether any action is re'uire$ toim!ro"e retention rates.
&t can !rom!t further in"estigations to estalishun$erlying causes an$ i$entify reme$ies.
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#aour $urno%er Contd'(
The consi$eration is gi"en to the follo%ingas!ects of laour turno"er
its signi*cance+metho$s of measurement+
the reasons for turno"er+
%hat it costs+
its inci$ence+ho% to enchmar rates of turno"er.
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)igni*+an+e of #aour $urno%er
The rates of laour turno"er !ro"i$e a gra!hicillustration of the turulence %ithin an organi#ation.
-igh rates of attrition can $estaili#e a usinessan$ $emoti"ate those %ho attem!t to maintainle"els of ser"ice an$ out!ut
ecruitment, in$uction an$ training costs all rise%ith an increase in laour turno"er.
Turno"er may e a function of negati"e /oattitu$es, lo% /o satisfaction, comine$ %ith anaility to secure em!loyment else%here,
Turno"er is a normal !art of organi#ationalfunctioning, an$ a certain le"el of turno"er is to ee0!ecte$
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)ur%i%al Rate
A metho$ of analysing turno"er that is!articularly useful for human resource!lanners is the sur"i"al rate
The !ro!ortion of em!loyees engage$ %ithina certain !erio$ %ho remains %ith theorgani#ation after so many months or years ofser"ice
An analysis of trainees %ho ha"e com!lete$their training might sho% that
1 after 2 years, 34 of the original cohort of 24trainees are still %ith the com!any, a sur"i"al
rate of 54 !er cent.
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)ur%i%al Rate Contd'(
Entry Original Number surviving to end of year afterengagement
Cohort strength Year 1 Year 2 Year 3 Year 4 Year 5
A 64 75 28 29 22 24 B 72 25 26 3: 38 3;
C 68 7: 77 74 25 27
D 78 72 2; 26 22 3:
E 62 79 74 29 27 23
Total 244 39; 362 325 334 344 A"erage
sur"i"al 344< 87< ;3< 92< 55< 54<
rate
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)ur%i%al Rate Contd'( Tale ao"e sho%s that half the numer of
recruits is lost o"er the ne0t *"e years.
To ensure that re'uire$ traine$ sta= area"ailale , - !lanning shoul$ e $one ase$on sur"i"al rate
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Cohort Analysis
A cohort is a grou! of em!loyees (homogeneous)%ho %ere taen on in the same time !erio$
Cohort analysis i$enti*es the sur"i"al rate of
!articular grou!s or cohorts of %orers.Cohort analysis in"ol"es !lotting a >sur"i"al
cur"e? to sho% ho% many remain an$ %hat!ro!ortion ha"e left o"er the inter"ening !erio$
ormula of )ur%i%or Analysis
Sur"i"or < @ (o. of remaining em!loyees at agi"en time)0 344(o. of em!loyees engage$ atthe start)
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Cohort AnalysisPattern
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Gallagher HR Estimator
Accor$ing to Gallagher, - Planning %as initially an im!ortantas!ect of o Analysis
&t %as often use$ as ases to
$etermine strengths F %eanesses among em!loyees F
$e"elo! sills F com!etencies they nee$e$
Gallagher mo$el incor!orates oth managerial /u$gement Fstatistical accuracy,
E @(HIG)0(3J)KL
here, E@umer of sta= nee$e$ at a s!eci*c future $ate,
H@ Current turno"er (*nancial),
G@ E0!ecte$ gro%th in turno"er (*nancial),
J@ Pro$ucti"ity im!ro"ement (in times) e0!ecte$ $uring the!erio$ an$
L@ Haour turno"er $i"i$e$ y the numer of sta=