Tutorial 4: HR Planning

Read the following case studies to help you answer the question that follow:
Question 1

Trimming More Than the Fat

Although getting leaner improves organization’s efficiency and makes it stronger for the long haul, some
organizations are so desperate to cut costs that they starve themselves of important human resources. A
technology company in Texas, for example, kept laying off employees in the design department until one
designer remained, who handled the work of three designers. The employee was afraid to quit during a
slow economy, but she was burning out from the strain of falling behind in spite of constant overtime and
taking work home. She gave her supervisor the choice between promoting her to art director position or
dividing the work among more people. The supervisor promoted her. Companies that downsized during
the recent recession may find themselves making such bargains because employees who feel exhausted
and unappreciated are beginning to indicate that they want to leave their employers to find better jobs.

Questions

1. In what ways do you think that downsizing in the technology company’s design department was
ineffective at improving the company’s performance?

2. Besides layoffs, how else might the design department respond to a decline in demand?

Question 2

Using Temporary Employees and Contractors

Temporary workers look like an ideal solution for when a company lands a big order, needs to catch up
on administrative work, or isn’t sure demand will continue at present levels. The company can hire
workers from a temp agency, or negotiate contracts for short-term projects. When the project or demand
falls, the company doesn’t have to figure out what to do with the workers. Additionally, the company may
be able to save money because it doesn’t have to provide benefits or withhold taxes from contract
workers’ pay. The Internal Revenue Service has guidelines for what constitutes and employee and an
independent contractor.

Companies can specify what they want a contractor to accomplish but if they tell the workers how to do
the work, or control the workers’ activities, then the workers are employees, not independent contractors.
Providing the workers with supplies or tools and reimbursing workers for expense associate with work
tend to be signs that the workers are employees. Providing workers with benefits is a sign that workers are
employees.
If a company hires workers from a temp agency and directly controls what the workers do, or if the
workers are used to perform key roles, the company may be seen by the government an employer, or a
“joint employer” with the temp agency.

1
Question

1. If you were an HR manager in a company that received a large order for products, and your
company was not capable of filling the order with its current staffing level, what are the
considerations that you would make about whether to hire full time employees, or whether to
contact a temp agency to hire contract/temp workers?

Question 3

Organizations use outsourcing as a way to operate more efficiently and to save money. They choose
outsourcing firms that promise to deliver the same or even a better quality at a lower cost. One of the
major reasons for outsourcing is the belief that outside companies specialize in each service that can
benefit economies of scale (the economic principle that producing in large quantities tends to lower the
production cost). However, implementation of outsourcing poses many challenges to organizations.

Question

Provide suggestions for employers to overcome HR challenges in outsourcing its services.

Question 4

A small company that manufactures special-order wood furniture has kept its employees busy on a 40-
hours-a-week schedule for the past two years. The company just received the largest contract in its history
from a Saudi Arabian company, opening offices in the area. The company does not expect repeat
business. In order to complete the contract in the required one month, additional skilled labor is needed at
short notice.

Which one of the following is a best suited strategy to avoid this short-term labor shortage in this small
manufacturing company? Explain your answer

A. Retrained transfers

B. Overtime

C. Technological innovation

D. New external hires

E. Turnover reductions