EXPANDING THE WORKFORCE

You are the human resource manager for Kaiser Electronics, Inc. Kaiser is considering expanding its operations in order to double its current $1.5 million in sales in five years. This means production must double. It will require expanding the workforce and payroll. You have been asked to project the staffing levels and payroll costs necessary to expand. You report that in addition to the current workforce, the following personnel will be required:

Two additional sales representatives

Two additional secretaries (both Level 6)

Ten additional assemblyline operators (Level 4) for the production department

Three additional materials handlers (Level 4) for the production department

One additional assembly-line supervisor (Level 14)

Now you must estimate the costs of adding these personnel to the payroll. Use the chart Future Payroll Estimates to compute your projection figures (assume the current pay scales remain unchanged). Then use the chart to answer the following questions:

1. What will be the projected annual payroll cost?

2. If Kaiser does double its sales in five years, what percentage of sales will payroll be in five years? What percentage is it today?

3. Would you recommend the expansion? Why or why not?

Future Payroll Estimates

Position	Pay Scale	Present Staff	Present Payroll	Projected Staff	Projected Payroll
Management Level 24 Level 18	$65,000 $45,000	1 1	$65,000 $45,000	_________ _________	_______________ _______________
Clerical Level 10 Level 6	$21,000 $16,000	2 3	$42,000 $48,000	_________ _________	_______________ _______________
Production Level 14 Level 10 Level 8 Level 5 Level 4	$26,000 $19,000 $16,000 $13,000 $11,000	3 1 2 2 13	$78,000 $19,000 $32,000 $26,000 $143,000	_________ _________ _________ _________ _________	_______________ _______________ _______________ _______________ _______________
Sales Level 10	$26,000	5	$130,000	_________	_______________
Totals		36	$628,000	_________	_______________