GB546 Unit 10 Staffing Business Case Example

Grow Twelve Technicians or Buy Them: A Unit 10 Staffing Business Case for an Operator Apprenticeship

[Student Name]

Purdue University Global

GB546: Talent Acquisition and Retention

Unit 10 Staffing Business Case

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[Date]

The plant, its staff and every cost and assumption are composite and illustrative; the sources cited are real.

Recommendation

Approve a twelve-person apprenticeship that trains current operators to become equipment technicians over one year, beginning next quarter, at a three-year cost of about $826,284. The apprenticeship includes mentor stipends for senior technicians and a tuition agreement with the community college certificate program; both are parts of this single request rather than separate proposals.

The Problem

Three earlier findings point to the same gap. The Unit 2 forecast requires about 42 technician hires in eighteen months. The Unit 3 scan judged that the Phoenix metro cannot supply that many experienced technicians at current wages, with two wafer fabs competing for the same people. The Unit 8 model priced each technician departure at $61,174. External hiring alone will leave seats empty, pay a premium to fill the rest and lose a fifth of those hired each year.

The plant cannot buy enough technicians in this market, so the real choice is between growing them and leaving seats empty.

Why Three Years

An apprenticeship front-loads its cost, paying wages for a year before an apprentice is fully productive, and returns value later through lower turnover and no market premium. External hiring spreads its cost through premiums and turnover. A one-year comparison would favor external hiring unfairly, so the case uses three years, long enough for the full pattern of both routes to appear.

The Apprenticeship Route

Unproductive wages, year one. Twelve apprentices earn $783,619 in their first year. During training they produce about 35 percent of a qualified technician's output, so 65 percent of wages, $509,352, buys no output.

Tuition. The certificate program costs $5,200 per apprentice, paid at enrollment, $62,400.

Mentor time. About 2,300 hours of senior technician time across the year, at a loaded $46.47 an hour including stipends, $107,078.

Year-one total: $678,830.

Operator backfill. Promoting twelve operators opens twelve operator seats, which cost about $2,500 each to fill, $30,000.

Turnover in years two and three. Apprentices promoted from within are assumed to leave at 8 percent a year, about 1.92 departures over two years at $61,174, $117,454.

Three-year total: $826,284.

The 8 percent rate is an assumption, informed by the plant's lower turnover among internally promoted technicians, and it is tested below. Lerman (2014) reviews evidence that employers often recover apprenticeship costs through lower recruiting costs and longer tenure, which is the mechanism this route relies on.

The External Route

Sign-on bonuses: $4,000 for each of twelve hires, $48,000.

Sourcing and recruiter time: mostly agency fees in a tight market, plus job boards and recruiter hours, $136,459.

Market premium: experienced technicians recruited from fabs require about $3.50 an hour above Halden's current rate, $262,080 over three years for twelve people.

Turnover: external technician hires leave at about 20 percent a year, about 7.2 departures over three years at $61,174, $440,453.

Three-year total if every seat fills: $886,992.

Unfilled seats. The Unit 3 scan suggests not every seat will fill. If 40 percent of the twelve seats, 4.8 seats, sit empty for half a year, each empty seat needs full vendor coverage, about $5,800 a week at $145 an hour plus about $290 of idle-tool margin, $6,090 a seat-week. Across 124.8 seat-weeks, that adds $760,032, for a total of $1,647,024.

The Comparison

With 40 percent of seats empty for half a year: external hiring costs $1,647,024 against $826,284 for the apprenticeship, $820,740 more.

If every external seat fills: external hiring costs $886,992, and the apprenticeship still wins by $60,708.

Cappelli (2008) argues that firms should build talent internally when the need is long-lasting and the market supply is thin, and both conditions hold here.

Sensitivity

Apprentice turnover matches external hires. If apprentices left at 20 percent rather than 8 percent in years two and three, about 2.88 more departures would add $176,181, raising the apprenticeship cost to $1,002,465. It would then lose to a fully filled external route by $115,473 but still beat the likely external case by $644,559.

Apprentices take longer to qualify. If productivity during training were 25 percent instead of 35, unproductive wages would rise by about $78,362, leaving the comparison largely unchanged.

Fewer apprentices complete. If two of twelve did not complete, the plant would need two external hires, adding roughly $147,832 at the external route's per-seat cost, still within the likely-case margin.

Cascio et al. (2019) recommend reporting how a human capital investment performs when its key assumptions fail, and the case holds in every scenario except the one where apprentice turnover rises and external hiring succeeds completely at once.

Measures

The case will be judged on four figures reported each quarter. Completion: the share of apprentices signed off on a tool family by the end of quarter four, with a target of at least ten of twelve. Productivity: output per apprentice against a qualified technician during training, to test the 35 percent assumption. Retention: apprentice-technician departures in years two and three, against the 8 percent assumption. Vacancy: the number of second-floor technician seats empty for more than four weeks, compared with the plant's experience before the apprenticeship. If completion falls below eight of twelve, or retention in year two is worse than external hires, the plant should pause the second cohort and review the selection process before continuing.

Why Not a Larger Cohort

A cohort of twelve matches the number of senior technicians who can mentor without harming their own tool coverage, at two apprentices each across six mentors. A larger cohort would spread mentors too thin in the first year, when the plant is also qualifying external hires for the first tranche. If the first cohort meets its targets, a second cohort can start in the following year with mentors drawn partly from the first.

Timeline

Quarter one: select twelve operators through an open process with a technical aptitude assessment and interviews; sign the college agreement; assign six mentors.

Quarters one through four: classroom certificate work alongside tool rotations on both floors.

End of quarter four: tool sign-off for apprentices who complete.

The first tranche of second-floor tools arrives before apprentices are ready, so its eight technicians must still be hired externally; the apprenticeship supplies the third tranche and replacement hiring.

Risks

Operator backfill strains the operator funnel. Twelve extra operator hires add to the quarterly need of about 96, which the Unit 7 fixes should absorb.

Mentors' own work suffers. The plan budgets mentor time explicitly and limits each mentor to two apprentices.

Apprentices are recruited away once qualified. A two-year commitment tied to the tuition benefit, repaid in part if an apprentice leaves early, reduces the risk without trapping anyone.

References

Cappelli, P. (2008). Talent on demand: Managing talent in an age of uncertainty. Harvard Business Press.

Cascio, W. F., Boudreau, J. W., & Fink, A. A. (2019). Investing in people: Financial impact of human resource initiatives (3rd ed.). Society for Human Resource Management.

Lerman, R. I. (2014). Do firms benefit from apprenticeship investments? IZA World of Labor, 55. https://doi.org/10.15185/izawol.55