Question

Strategic Organizational Issues on Projects

Suppose you have a highly experienced and talented software developer, temporarily working for you on a client software development project. This individual’s time on the project will be ending in two weeks, and he is due to return to his home department. While your project is a high profile project for your company, you know that your project could do without his efforts at the end of the two weeks. At the same time, you are aware that his department is planning to do away with his position because of his department’s downsizing activities. You feel it is important that his talent and extensive experience be kept on the company payroll, although keeping him on your project will increase expenses unnecessarily. As the project manager, what will be your decision and why? Discuss your decision in the context of overall organizational strategy.

Answer 1

Of all it is a known fact that it is more expensive to hire a new employee than to lay off an existing employee in the organization.
There is a highly experienced and talented software developer working in the organization. As the project manager, my decision will be to retain the employee some way or the other. It is because it will take some time to search a new employee like that when the company suddenly has requirement for such type of employee due to bagging of a new project. Further a new employee has to given some type of training to get acquainted with the organization culture and style of working. This will involve both time and extra cost for the organization. All this can be avoided by retaining the existing employee.
I will suggest to the Management of the organization to keep the employee "on the bench" (i.e., not giving any project to the employee but retaining him in the organization by paying him a certain percentage of his salary) for some period of time till a new project comes up where his expertise and experience will come very handy. This way the company will not have to pay him full salary (and thus save cost) for the time-being and at the same time retain him to be used for future projects. This decision will also be in linewith the overall organizational strategy which is now one of cost-cutting because of which the employee's department is going for downsizing and trying to eliminate his position.
I will also pacify the employee by clearly explaining the situation at hand and the reason for putting him "on the bench". This will prevent him from leaving the current organization for that reason.
Also my above decision is not a bad one or an illogical one as putting employees "on the bench" is a common practice in the IT (Information Technology) industry. Also many IT contracts have a stipulation of maintenance of some "bench strength" by the organization.