Assume Digby Corp. is downsizing the size of their workforce by 10% (to the near

Question

Assume Digby Corp. is downsizing the size of their workforce by 10% (to the nearest person) next year from various strategic initiatives. Digby is planning to conduct exit interviews to learn more about how they can improve in processes and increase productivity. The exit interviews are estimated to cost $100 per employee in additional to normal separation costs of $5000. How much will the company pay in separation costs if these exit interviews are implemented next year? Select: 1Save Answer $199,920 $82,320 $1,799,280 $740,880

HUMAN RESOURCES SUMMARY Andrews Baldwin Chester Digby Needed Complement 350 565 690 392 Complement 350 565 690 392 1st Shift Complement 233 327 364 252 2nd Shift Complement 117 238 327 140 Overtime% 0.0% 0.0% 0.0% 0.0% Turnover Rate 6.8% 6.0% 10.0% 7.9% New Employees 24 34 113 31 Separated Employees 399 49 0 150 Recruiting Spend $2,600 $5,000 $0 $2,500 Training Hours 80 80 0 40 Productivity Index 113.7% 130.3% 100.0% 118.0% Recruiting Cost $85 $203 $113 $109 Separation Cost $1,995 $244 $0 $749 Training Cost $560 $905 $0 $314 Total HR Admin Cost $2,640 $1,352 $113 $1,172 Labor Contract Next Year Wages $31.04 $31.04 $31.04 $31.04 Benefits 2,500 2,500 2,500 2,500 Profit Sharing 2.0% 2.0% 2.0% 2.0% Annual Raise 5.0% 5.0% 5.0% 5.0% Starting Negotiation Position Wages Benefits Profit Sharing Annual Raise Ceiling Negotiation Position Wages Benefits Profit Sharing Annual Raise Adjusted Labor Demands Wages Benefits Profit Sharing Annual Raise Strike Days

Explanation / Answer

EXISTING WORKFORCE = COMPLEMENT = 392 (SEE SECOND ROW, FOURTH COLUMN)

COMPANY WANT TO REDUCE THE SIZE BY 10%

SO NEW WORKFORCE = 392 -10% = 392-39.2 =352.8

SO TOTAL SEPARATION COST = NEW WORKFORCE X COST PER EMPLOYEE

TOTAL SEPARATION COST = 352.8 x (100 + 5000) =$1799280 ANSWER

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