Markov Analysis Example

This first chart is a transition probability matrix:

	Transition Probability
	Positions		Current Year
			1	2	3	4	5	Exit
1	Tellers		0.56	0.11	0.03	0.00	0.00	0.30
2	Customer Service Reps		0.00	0.46	0.08	0.05	0.00	0.41
3	Teller Supervisor		0.00	0.00	0.63	0.12	0.00	0.25
4	Assistant Branch Manager		0.00	0.00	0.00	0.52	0.08	0.40
5	Branch Manager		0.00	0.00	0.00	0.00	0.70	0.30

This chart shows that 30% of tellers exited the company (41% of CSRs, 25% of Teller Supervisors, etc.). This also represents percentages of employees moving to other positions. For example: 46% of CSRs stayed in their current position, while 8% were promoted to Teller Supervisors and 5% were promoted to Assistant Branch Managers.

Based on the probabilities above you should be able to forecast the number of employees moving into other positions. For example: 336 tellers remained in their current position, 64 moved to CSR, 20 moved to Teller Supervisor and 180 left the company. The left column of the chart represents the positions available in the company. (1) Teller (2) Customer Service Representative (3) Assistant Branch Manager (4) Loan Officer (5) Branch Manager. The Next year projected is the number of employees that will be in each position and how many will leave (1-5 represents the positions in column 2.)

Forecast
Positions		Next	Year	(Projected)
	Current Workforce	1	2	3	4	5	Exit
Tellers	600	336	66	18	0	0	180
Customer Service Rep	300	0
Teller Supervisor	200	0
Assistant Branch Manager	75	0
Branch Manager	100	0

From the information provided, complete the Forecast for the next year. The tellers have been completed for you as an example.

Next you can sum the columns above to determine the gaps for the coming year. For example, at year end you have 336 Tellers and will need to hire 264 externally. Complete the remainder of the gap analysis to determine how many projected hires will be needed in the coming year.

Gap Analysis		1	2	3	4	5
Year End Total		336
(column Sum)
External Hires Needed		264
(Current Workforce -total)

Discussion Question:

Based on the information provided, develop an action plan for hiring for the company next year, including an overview of individuals needed. What further recommendations might you have related to the data provided?