Reference no: EM133518238
Case Study: Come up with recommendations to be presented to the Board of Directors of the fictional HiTec company on how to handle a reduction in force due to a drastic loss of business resulting from a worldwide pandemic.
HiTec is a privately held financial technology (FinTech) support company, headquartered in New York, NY. The Company provides broad-spectrum customer service support for several app-based FinTech companies.
HiTec has two customer service call centers; one in Huntington, WV. (which is a union location) and one in Richmond, Va. (a non-union location).
HiTec's 2019 EBITDA was well under expectations, and this year's projections are extremely problematic due to the loss of business that has resulted from the economic impact of the Coronavirus pandemic. The Board has concluded that in order to survive until business returns to pre-pandemic levels, which may take several years, it must reduce costs dramatically. The board has sent down a directive to the CHRO to reduce labor costs by at least 20%. Your final assignment is to develop a plan of action to develop a reduction in force strategy that reduces labor costs in the two customer service call centers by a total of 20%, while complying with all legal obligations and minimizing the risk of lawsuits.
The burden rates for each of these facilities are:
Huntington: 26%
Richmond: 21%
The burden rate is the total cost to HiTec for hiring and maintaining an employee beyond his/her direct compensation in wages. The burden rate includes items such as training, fringe benefits, sick leave, administration and pension contributions.
Questions:
- Identify HiTec policies that would be relevant to review and understand their implications.
- Anticipate the internal decisions management must consider to craft a reduction in force ("RIF") plan.
- Explain the selection process you will employ. How will that help manage HR-related risks and liability?
- What risks, if any, should you discuss with legal counsel?
- How will you retain your best talent?
- How will you communicate these decisions to employees; the organization and the media (in the event that the RIF attracts media attention)?
- If, after the RIF, you receive an EEOC charge claiming that your RIF was motivated by age discrimination, what strategies did you put in place to anticipate and address these risks?