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?

D) $882,630

Select: 1 A) $98,070 B) $2,143,530 C) $238,170

D) $882,630

HUMAN RESOURCES SUMMARY Andrews 362 362 245 Chester 289 289 204 Digby 467 467 Baldwin Needed Complement Complement 1st Shift Complement 2nd Shift Complement 641 641 389 252 152 Overtime % Turnover Rate New Employees Separated Employees Recruiting Spend Training Hours Productivity Index 0 0% 10.0% 0.0% 60% 6.6% 8.0% 109 $5,000 80 130.5% 134 $2,500 0 $5,000 80 117.2% 0 100.0% 118.1% Recruiting Cost Separation Cost Training Cost Total HR Admin Cost $142 $400 $579 $1,122 $81 $669 $232 $981 $168 $543 $747 $1,459 $67 S67 Labor Contract Next Year Wages Benefits Profit Sharing Annual Raise $31.04 2,500 20% 5.0% $31.04 2,500 20% 50% $31.04 2,500 20% 5.0% $31.04 2,500 20% 50% 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

B) $2,143,530

Size of workforce existing complement * 10% = 467 * 10% = 46.7

New workforce = 467 - 46.7 = 420.3

Separation costs = New workforce * cost per employee = 420.3 * ($100 + $5000) = $ 2,143,530

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