Personnel Analysis

Now that the decision was made to the plant upgrade the building a new one their was a question of whether or not to hire more people or better train the people they had and expect more production out of them.  Currently McCormick had 11700 workers that produce 15 million pound of spices per year.  Which means currently on each employee is on average producing 1282 pounds of spices per year.  Management would like to increase production but 13%., or 1,950,000 lbs per year (for a total of 16,950,000 lbs/year), in order to meet the expected high growth demand.  Workers generally make approximately $12/hour at a cost of $24,960/ year.  However, in 2018 because demand was so high the average worker logged approximately 140 hours of overtime for an additional cost of $2,520 per worker (or $29,484,000).  With the current staff overtime cost is expected to increase by 19% to meet the high growth rate at a cost of $35,085,960 for the year of 2019.  The financial analyst said that instead of relying on current works to increase their load and in turn McCormick’s overtime cost and potential the turnover rate, it would be better to hire 1860 new workers at the same $12/hr rate.  By doing this it will cost $46,425,600/year in payroll cost, but it will decrease employee workload to 1250 lbs/year for each worker and still allow the company to reach its goal of 16,950,000 lbs per year.  Thus, causing productivity to increase and the potential for errors to decrease.

	Number of Workers	Production per Worker per Year	Total Production Per Year	Total Yearly Payroll cost ($) (OT Factored in)
Current Workers	11700	1282	15,000,000	321,516,000
New Workers (forecasted)	1860	1250	2,325,000	46,425,600
Total Forecasted Workers for 2019	13,560	1250	16,950,000	338,457,600