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SCENARIO
You are the Director of Human Resources for Valley Power, a private, family-owned, small power company in rural Pennsylvania. You have been called into a meeting with the CEO. She describes to you two new strategic directions for the company that are in the works, in addition to the rationale for each. She needs your help in determining the foreseeable and unforeseeable events related to one of the approaches.
Context. There is a rapidly declining supply of easily-accessed coal, or “easy coal.” Larger and more capital-rich companies are using up easy coal at an increased rate, forcing smaller companies to either purchase these supplies at a mark-up, or extract deeper coal veins themselves. In either case, the cost of obtaining coal is going up…fast. The company is faced with major decisions.
Strategy #1: Downsize and Modernize
First, the company is considering reducing its workforce costs dramatically in order to have enough funds to invest in new techniques and equipment to access harder-to-access sources of coal. This would enable the company to stay in rural Pennsylvania where it has been for the past 50 years, but with a leaner and more efficient workforce that will have the latest tools at their disposal. She calculates a 50% reduction in FTE and a 25% reduction in the company’s total benefits package. Despite these cuts, she is confident that Valley Power could stay in rural Pennsylvania for the foreseeable future.
Strategy #2: Change of Business Model and Move
The company is seriously considering moving from non-renewable sources of energy (coal) to solar power which has been steadily growing in demand since 2009. In order to do so, Valley Power would need to move its primary operations from Pennsylvania to Southern California where demand is highest and growing rapidly. This move would warrant major investments in infrastructure, which the company plans on funding from the sale of its current fixed capital. The CEO states that she already has three offers from larger power companies to purchase the capital. This strategy would also allow Valley Power to retain 80% of its FTE and retain its current total benefits package.
Your Responsibility
As the Director of HR for Valley Power, you have decided to utilize a Scenario-Based Workforce Planning method to determine both foreseeable and unforeseeable events. For this assignment:
- Pick one strategy
- Utilizing this guide, create a scenario for this strategy. Page 3 of the guide has a series of steps you can utilize for your scenario.
- You can create your own data and information in areas of the plan that call for them. Just ensure that you use critical thinking in making your choices, and support your data with references when appropriate.
- Be creative and really think about the foreseeable and unforeseeable events related to each step.
The goal for this assignment is to expose you to the scenario-based workforce planning method. The accuracy of data and numbers are not as important as the steps you go through to create a scenario for the CEO that includes both foreseeable and unforeseeable events.
