question archive Submission The Situation: Imagine that you own a small software company
Submission The Situation: Imagine that you own a small software company
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Submission The Situation: Imagine that you own a small software company. The company currently has three full time employees, including yourself as the CEO. There is one person (software developer) who writes software based on specifications provided by you. There is one person (testing and support) whose job it is to test new software and to help customers find solutions to problems they may run into with the software product.You have determined that you can leverage your existing code to create a new product which will result in a significant increase in sales. In order to capitalize on this, you will need to expand software development, testing, and customer support. However, the new software has a limited lifetime in the marketplace, and will be obsolete in two years.You can hire locally, either full time or contract, for the 3 new positions. It will require two software developers and one new support position. A typical cost for full time positions would be $40,000 to $60,000 per year, plus about 25% in benefits. Contract positions tend to have a higher pay rate, but are limited in time, so there is no ongoing commitment from the employer.Finally, you have been introduced to an offshore development company in India which does outsourcing. They will provide the same quality of services at approximately one third of the cost, including 24/7 coverage for support. It will take some additional time to manage a process so far away, but it has the added advantage that problems with the software can be fixed "overnight", since the software developers are working with a time difference that is 9 hours ahead.In summary, there are 3 HR Strategy Options here: 1. hire fulltime 2. hire contract or temporary employees 3. send the work offshore to an outsourcing company.Please answer the following questions & submit your response to the appropriate Submission folder in FOL. 1.Which option is the lowest cost for the company? Explain your reasoning.2.Which option has the lowest risk for the company? Explain your reasoning.3.Would you consult with your existing staff before making a decision on additional staffing? Whatare the benefits and difficulties with involving your existing staff in the decision-making?4.Would your decision be influenced if you had a friend who was looking for work? Why or why not?5.Knowing what you do at this point, which HR strategy option would you prefer to implement in this situation? Explain your reasonin
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Which option is the lowest cost for the company? Explain your reasoning.
Sending off the job offshore to an outsourcer company could be the lowest option. This strategy gives the business 1/3rd the expense of getting the program performed as opposed to having to recruit locally and pay all salaries on top 25 percent benefits.
Which option has the lowest risk for the company? Explain your reasoning.
Offshoring work to an outsourcer is a low risk, as a 9-hour time difference is provided in the case of working in India. This advantage may be that if the program fails and is not ready to use overnight, the 9-hour difference gives us the ability to repair it before the day begins.
Would you consult with your existing staff before making a decision on additional staffing? What are the benefits and difficulties with involving your existing staff in the decision-making?
I should consider talking to my current employees as this makes them feel included in my company. Increasing efficiency is a benefit of employee engagement. If they are given the ability to share their opinion, they would feel good about their employers, so loving to come to work and be efficient. A drawback will be when unions start exchanging knowledge, this may lead to raining their bargaining power and then the business will lose out.
Would decision be influenced if you had a friend who was looking for work? Why or why not?
Before setting out to go offshore, I might be willing to consider having the opportunity to see their work. We need to set the basis for wages and obligations that need to be equal to them. So, just because you're a friend, it would be hard to let them know that I'm going to recruit you, but I'm not going to pay you that much. So it can be challenging.
Knowing what you do at this point, which HR strategy option would you prefer to implement in this situation? Explain your reasoning.
The market focuses on the applications to be developed, through understanding the business strategy. Interviewing offshore companies and being able to involve them in the business might be challenging, but we can set up online interviews and create a contract that is legal to obey. My business saves a lot of money this way, it doesn't have to pay benefits, time difference can be a profit.
