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Cohort and Census Analysis

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20 views9 pages

Cohort and Census Analysis

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vmeghana065
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We take content rights seriously. If you suspect this is your content, claim it here.
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Cohort analysis & Census analysis

Module II
• A cohort is a group of people who share common characteristics, attributes, likes
and dislikes for a specified period of time.

• The similar attributes and experiences are what differentiate one cohort from
another. These attributes could be anything: place, behavior, age, gender or
profession that helps group people in a cohort.
examples of cohorts are

• Customers who sign up for a membership program in a specific month

• Users who signed up for a free trial in the third week of July

• Users who signed up for a product via organic search

• Customers who subscribed for a newly launched paid feature after the first email

• Employees who took more than five days off in the third quarter
• Cohort analysis segregates a larger pool of customers into smaller cohorts to track
and analyse their behaviours and trends over a specified time range. It’s a
powerful way to get insights into how and why groups behave in a certain way,
which lets businesses make better decisions.

• For example, with cohort analysis, a marketing manager can understand that
customers who signed up for a product after attending a product demo had a better
retention rate than customers who didn’t participate in the demo.
Area of use

• Cohort analysis is applicable in any department: marketing, human resources,


sales and even healthcare. For instance, marketers can create targeted campaigns
for better retention and lower churn rates. Likewise, HR teams can validate if their
training and strategies are useful or not.
Cohort Analysis in manpower planning

• Manpower cohort in an organisation is a group of staff who are more or less homogenous
and who joined the organisation at the same time. Graphical presentation of leavers (those
leaving the organisation at each point of time from the date of joining to the date by which
the entire cohort would have disappeared) resembles.

• In each cohort the peak of leaving occurs shortly after joining when either the manpower
leaving realises that the job is not suitable to them or the employers find out that the
leavers are not suitable to the organisation. The peak is, however, determined by the
nature of job, work environment and career prospects within the organisation. The
objective of manpower planning is to see that the peak of leavers does not arise early in
the life of a cohort.
Cohort Analysis in manpower planning

• A slight transformation of Figure I by plotting cumulative percentage of leavers in the


cohort on the vertical axis and logarithm of time on the horizontal axis the curve in
Figure I becomes a straight line as in Figure II.

• In statistical terminology, the transformation effected above is termed as the log-normal


transformation. Using this curve, then forecasts of percentage of total leavers of a
particular cohort at any future date can be made through extrapolation.

• Cohort analysis is thus very useful in analysing and forecasting wastage of specific groups
of manpower who have similar characteristics and also joined at a particular time of the
year such as management trainees, trainee escorts and computer professionals.
Disadvantages of cohort

• First, forecasting exercise requires information on year wise wastage from a


cohort. If there are many cohorts it may not be a very easy task.

• Second, if the manpower is relatively stable as is the case in government jobs or


public sector organisations which assure job security – the length of time over
which a cohort must be followed can be too unwieldy to attempt any reliable
forecasts.
Census Method

• Some of the problems of cohort method can be overcome by using the census method.

• Under the census method a snapshot of the total situation is taken at a particular point of time
or over a short period of time and data on leavers with completed length of service is obtained. \

• Based on such data, it is possible to estimate – with the help of standard statistical techniques –
the proportion of manpower joining at a given point of time who will survive to a specified
length of service.

• For example, based on the census method it is possible to estimate proportion of manpower
joining the service (say) in 1990 who will complete 10 years of service.

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