Research Proposal

STR/581 Strategic Planning and Implementation
September 25, 2013

Research Proposal

The topic chosen to research and innovate is a social enterprise startup, called Micro Benefits. This financial consulting group provides affordable micro-benefits such as credit, insurance, education, and lifestyle discounts to low-income workers in factories. The employee benefits platform not only benefits the employees, but it also benefits the employers by lowering attrition and saving millions in cost associated with very high turnover, which are particularly staggering in China. The proposed plan is to provide access to higher education to the workers to innovatively grow this already proven profitable business model.
“Social enterprises are businesses whose primary purpose is the common good. They use the methods and disciplines of business and the power of the marketplace to advance their social, environmental and human justice agendas” (Social Enterprise Alliance, 2013). Micro Benefit’s mission is to improve the lives of migrant and factory workers through and economically sustainable business model that creates real value for customers (Weibangfuli, 2013).
For the employers: currently, there is a drastic need for factories to retain employees, because in China it is common for the frontline workers to leave and migrate to the next factory or job – never staying long. Out of 350 million workers, 150 million migrate out of their province for work. This causes an undue financial hardship on the employers, as this kind of attrition requires added costs associated with hiring and training new employees. Average monthly turnover is hovering at 15% at a cost of 3,000 RMB per replacement to hire (Weibangfuli, 2013). According to a Hay Group Chinese study (2011), a 1,000-person factory has an annual turnover expense of 5.4 million RMB. Limited High attrition and lower tenure also leads to lower skill level, lower performance measures and overall productivity, and lowered engagement. With the pressures that factory clients have to maximize the bottom line, employers find it a challenge provide competitive benefits and salaries that can effectively increase employee satisfaction and retention. Further compounding
For the employees, currently the average monthly salary is 2,000 RMB according to China’s National Bureau of Statistics (2011). Only 28% of workers have accidental insurance, while 17.8% have social health insurance. Lastly, only 23% have graduated past middle school (Suzhou Daily, 2010). While Micro Benefits has been successful in providing frontline workers with credit (usually with no interest), access to affordable health insurance, and applications for training and employee engagement, what is lacking is an opportunity for these workers to receive access to higher education. Providing an outlet for earning a college-level degree would provide the employee with an opportunity to grow within the company in ways that would reach beyond what is currently being offered. This would change the employees’ lives in a more far-reaching and meaningful way, while benefitting the employer at the same time by having more highly-skilled workers. This innovative proposal is in line with the company mission of further improving the lives of the migrant worker while providing real value for the customer at the same time.
An external environmental analysis is used to examine threats, challenges, as well as opportunities that exist that are largely out of the immediate control of the company. Barriers unique to Micro Benefits include all of the conditions that exist as a U.S. startup working outside of the United States in China. China is a communist country with vastly a different government, regulations, laws, culture, and language. Political and social changes could be a barrier Micro Benefits will need to learn to maneuver with a recommendation to hire as much local talent to buffer these challenges and provide value-added input in business decisions. A SWOT analysis should be developed to understand what the strengths, weaknesses, opportunities, and threats. These should be considered in relation to competitors as well as customers.
An internal environmental analysis is similar to external, however, specifically deals with barriers and opportunities the company sees from within its own organization. What are the core values of the company? What type of leadership will the company have? An internal SWOT analysis should be conducted. An example of an internal threat could be a former employee branching off and taking along with him the knowledge and skills garnered within, in addition to attempting to recruit current talent.

Reference:
China’s National Bureau of Statistics. (2011). Blue Collar Workers Investigation Report, 2011. Retrieved from http://www.stats.gov.cn/english/
Hay Group. (2011). The Hay Group China Study Listed at 3,000RMB. Retrieved from www.haygroup.com/downloads/ww/Talent_M_WP_AW_V7.pdf‎
Social Enterprise Alliance. (2013). The Case for Social Enterprise Alliance – What’s a Social Enterprise. Retrieved from https://www.se-alliance.org/why.
Suzhou Daily. (2010). Monthly Salary of 3000 RMB Cannot Keep Them: Switching Out a Batch of Blue Collar Workers Every Four Months. Retrieved from http://www.weibangfuli.com/doing_good_profitably.html
Weibangfuli. (2013). Doing Good Profitability - The Need. Retrieved from http://www.weibangfuli.com/doing_good_profitably.html