Abstract
A stochastic model for a hierarchically-structured company is presented which accounts for the effect on wastage of the internal structure of the company and the promotion experience of its employees. We differentiate two main reasons for leaving, owing to the company's internal structure, and the model is formulated on the basis of the joint probabilities of the employee being in service or having left the company because of either reason by time t and his promotion experience up to t. It is shown that the model provides a good fit to a variety of observed leaving patterns of five large companies, explains the relationship between a number of important occupational variables and is useful for planning purposes in predicting future developments.