Question

Suppose that it has just been projected that, because of a number of technological innova- tions, your firm will need 20 percent fewer clerical employees within the next three years. There are currently 122 clerical positions in the company, split between three departments of equal size. Retirements at this level are projected to be roughly 2 percent per year. Annual vol- untary turnover and involuntary turnover for Department A is 2 percent and 5 percent, respectively; Department B is 3 percent and 3 percent; and Department C is 5 percent and 0 percent. Do you project a labour shortage or surplus in the next three years for clerical positions

Answer 1

Answer:

There will be a labor shortage

Explanation:

number of clerical staffs present = 122 staffs

number of clerical staffs needed in 3 years

= 122 - ( 20% * 122 ) = 97.6 ≈ 98 staffs

next : lets project the number of employees in next three years considering the voluntary and involuntary turnovers

= 122*(1-2%)^3 * (((1-7%)^3)/3  +  ((1-6%)^3)/3  +  ((1-5%)^3)/3)

= 95.4 ≈ 94 staffs

since the projected number of employees is < number of clerical staffs needed in 3 years, There will be a labor shortage