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Five Year Business Plan

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SMC Company Five-Year HR Forecast

The local labor market has continued to shrink and labor costs have continued to soar over the past two years. SMC's workforce has now become bilingual and has had to deal with occasional unsuccessful attempts for its labor force to organize a union. To remain competitive for the next five years and sustain its growing sales, SMC Company will have to address staffing, employee development and training, compensation and benefits, employee relations, and safety and health issues. SMC must consider elements in developing the five-year plan such as technological advances, globalization, diversity, e-business and ethics.

The ultimate goal at SMC Corporation is continued growth. One aspect that will determine SMC's success is to predict what labor will look like over the next five years. By looking at the demographics of the Shaker Heights labor force along with the available work force of the surrounding area, a forecast of potential employees can be produced. SMC must look for new inventive ways for the current staff to increase productivity. These actions give SMC the ability to empower their employees to think on their own and present ideas that increase productivity without increasing headcount. SMC can also look to The Bureau of Labor Statistics of the U.S. Department of Labor for information on the projected supply and demand for any specific occupation. (Dessler, 2000, pg. 133).

When considering the projected labor force, SMC must predict future cost of labor. SMC has been located in Shaker Heights since it's inception. One concern for the future is being able to maintain all operations of the company in this location. An aspect that may effect keeping the entire production in Shaker Heights, is the cost of the local labor force versus cost of labor elsewhere and the global manufacturing environment. For instance the cost of labor (US dollars) in Mexico averages $1.51 per hour to the United States who averages $17.20 per hour, to the United Kingdom who averages $13.77 per hour. (Dessler, 2000, pg. 617). With such a broad range in labor costs SMC should consider building a manufacturing facility outside the US. SMC will need to find ways to increase production without dramatically increasing overhead. With all the departments working together, SMC will continue to meet their goals while constantly upgrading their processes and continuing to maintain their image and competitive edge.

SMC has experienced unsuccessful attempts by a national labor union to organize the non-management workforce. SMC management has taken the position that the non-management labor pool has the right, as defined by law, to vote on whether or not to organize. In the United States, workers may choose to work in a unionized or non-unionized workplace; both situations have positive and negative attributes. In a unionized situation, members may experience benefits such as union representation, and possible aversions such as layoffs and strikes. In a non-union situation, workers may experience benefits such as better relationships with management and aversions such as reduction in staffing or possible decreased benefits and wages.

SMC Company will ask that all employees keep in mind that it is important to look at a few key factors regarding unions, including; the history of unions, the types of unions available, and the pros and cons of unions. It is also important to note some key factors of non-union workshops, such as labor laws, benefits of non-union employers hiring non-union workers.

SMC Company does not desire to have its manufacturing plant become organized by a national labor union. The company wishes to remain non-union to maintain flexibility in labor relations and to avoid the constraining bargaining of a labor agreement. The SMC Company needs the flexibility during growth years to examine the possibility of constructing a manufacturing plant outside the country. Critical business needs would be severely hindered if the company had to negotiate with a collective bargaining unit that is not sympathetic to the SMC long-range international growth plans.

After careful consideration, the following succession planning candidates have been nominated:


Since SMC's workforce is now bilingual (Portugese), certain criteria should be followed. All signs, memos and important notices within the company must be in both languages. Applications and interviews must be equal in their assessment of each candidate. It is recommended that at least one person from the Human Resource department be trained in international sign language. Additional tools such as on site "English as a Second Language" classes should be provided. Supervisors should be offered basic courses in secondary languages to assist in the communication process with their staff.

Staffing for the next five years will have to incorporate several factors as the company grows.

* Technological advances - Upgrade internal production systems and install

robotics within the production line

* Globalization - Hire global business consultant to evaluate the possibility of opening an office outside the US.




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