Under Armour Inc
Under Armour Inc, is a company that manufactures and sells footwear, sports and casual apparels and accessories. The company is in the industry of Apparel and accessories as well as Fast-moving Consumer Goods. Under Armour’s portfolio ranges from Footwear, sportswear, sports equipment, toiletries.
The company headquarter is in Baltimore, Maryland, United States of America. It has regional offices around the world i.e. Austin, Paris, Pittsburgh, Portland, San Francisco, São Paulo, Santiago, Seoul, Shanghai, Guangzhou, Hong Kong, Houston, Jakarta, London, Mexico City, Munich, New York City, Panama City and Amsterdam.
The company has over 16,000 employees and has employed more people indirectly. The employees are distributed in different departments in the organisation i.e. Administration, Finance, Sales and Distribution, Marketing, Product Development, Advertisement, Production, among others. The organisation is structured from top management to low levels of the workforce. The average salary payable across the different cadres ranges from $46,668 to $ 125,705 with an average of $ 73,739 per annum with an annual increment of 5%
With an estimated 6% labour turnover, the company will need to recruit 960 employees per annum. Currently, the company has outsourced recruitment services to HHM Recruitment agency to recruit on their behalf at an average rate of $ 10,000 bringing the cost per annum to $ 9,600,000.
NPV is the difference between the present values of present and future cash flows and those of present and future outflows. This technique is in checking the viability of a project by analysing the potential profitability of the project. A positive Net Present Value shows that the income generated exceeds the costs anticipated in present terms and vice versa. Projects with a positive net present value should be considered.
A benefit-cost ratio (BCR) is a ratio used in a cost-benefit analysis to summarize the overall relationship between the relative costs and benefits of a proposed project. BCR can be expressed in monetary or qualitative terms. If a project has a BCR greater than 1.0, the project is expected to deliver a positive net present value to a firm and its investors.
The main competitors to Under Armour are Adidas, Nike among others. The competitors are well established with over 3 times the number of employees in comparison to Under Armour’. For that reason, the company should adopt any strategy that will give them a competitive edge and in this case, the savings that will accrue by establishing a recruitment department will give them a competitive edge by economies of scale
Cost-Benefit Analysis of recruitment department advocates for its establishment because the project has a positive Net Present Value of $ 13,554,660.74 and a Benefit-Cost Ratio of 2.7. Thus Under Armour should establish the Recruitment Department.