HR Case Study 18
STHRM, Inc. Saves Growing Medical Device Company $5,573,000
Providing value to its clients since 1993, Shared Time Human Resources Management, Inc. is a value-oriented human resources solutions company. Through private consulting and custom-designed systems, STHRM, Inc. presents a high-value/low-cost solution to fixed-cost human capital issues. STHRM, Inc. staff has more than 30 years of corporate human resources experience with Fortune and Inc. 500 companies as well as privately owned businesses.
The client is a privately held electronic design and contract manufacturer of miniaturized medical devices with 125 employees.
STHRM, Inc. was hired as the Interim Director, Human Resources.
Saved $5,000,000 by not using external recruiters to hire senior staff leadership, professional, and production employees.
Implemented pre-employment physicals and drug and alcohol testing for all new employees.
Instituted fitness-for-duty physical examination, resulting in two employees being disqualification from employment.
Health Care and 401(k) Benefits
Health insurance cost savings of $521,000.
Worked cooperatively with health care broker to obtain two year health insurance contract at 9% increase the first year and 4% increase the second year.
Bundled group life, dental, and vision insurance and 2% discount on health insurance.
Implemented annual preventative physical for employees and their spouses to minimize catastrophic diseases in the future.
Directed employees to obtain flu shots via hospitalization and preventative medical checks with an annual cost savings of $2,000.
Recommended 401(k) change to fiduciary trustee relationship to a custodial trustee agreement between the company and Capital Bank and Trust Company, trustee.
Recommended stair-stepped increases to company 401(k) match from $0.25 to dollar-to-dollar with a maximum limit.
Increased employee 401(k) participation by 31.5%.
Developed and chaired in quarterly 401(k) investment committee.
Investment committee recommended investment plan design changes and removal of under-performing investments.
Redistributed $50,000 in forfeited vesting dollars to fund company match and ERISA audit.
Developed annual merit budget planning cycle.
Developed performance management system.
Developed performance improvement plan.
Conducted internal investigations for inappropriate behavior, which resulted in termination of employment.
Saved and estimated $200,000 challenging a former employee’s unemployment compensation.
Won cases before the Ohio Unemployment Review Commission.
No lost-time accidents for 62 months.
Initiated and implemented BWC’s Transitional Work Program.
Human Resources Metrics
Developed monthly human resources metric report quantifying head count, terminations, open positions, average wages and salaries, hours worked, safety, shipments per employee per month and more.
Ohio Incumbent Workers Training implemented company-wide.
Toyota Production System.
Made In America Grant company-wide training.
ISO 13845 medical devices.
Good Manufacturing Practices.
Micro Burden Cleanroom.
STHRM, Inc. leadership achieved the following financial results:
Internal rate of return net annualized savings of $5,573,000, leading to a return on the client’s investment of 88.85%.
Provided client an opportunity to increase Operating Income Improvement savings of $5,573,000.
Based on an improvement of $5,573,000 in EBITDA, estimated value creation for this client is in excess of $27,865,000 (multiple of 5) $33,438,000 (multiple of 6).
Notice: In order to maintain strict client confidentiality, business-specific information has been removed from this case study. The presented situations, activities, programs, projects, actions, and subsequent results are accurate.
If you are interested in learning more about this case study, results and services offered by STHRM, Inc. please contact, Glenn Levar (telephone: 440-979-1046, e-mail: firstname.lastname@example.org). To learn more about STHRM, Inc. visit www.sthrm.com.
STHRM, Inc. has teams and strategic alliances with executive wealth management experts, health and life insurance brokers, 401(k) providers, interim executives, professional advisers, operations professionals, third-party workers’ compensation administrators, and employment/contract attorneys.
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