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Internal Project Proposal

By: Nicole Nguyen


02/26/19

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Table of Contents

Executive Summary…………………………1

Problem / Necessity…………………………2

Project Description……...…………………...3

Cost Analysis…………………………...……6

Assessment Strategy……………………......7

Conclusion…………………………………... 8

Appendix……………………………………...9

Executive Summary
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As a company1 located in an area where there are numerous of surrounding
corporate buildings, I have seen an issue regarding the living situations of my
fellow co-workers. We have about 5,700 employees currently working here and
many of them work for an average salary of about $85,000. This brings me to
the problem at hand, which is employee retention. Many employees are
unsatisfied with working at our company where the cost of living is high
compared to their salary.

As a solution, I propose that we implement housing programs that will assist


employees by providing on campus housing. With on campus housing, we can
reduce our employee’s commuting costs to near nothing, increase productivity
within the company and acquire skilled people to work with us. This plan is sure
to benefit the livelihood of our employees and will in turn benefit our company as
a whole.

The number of housing units and costs are all outlined in the following pages.
Along with all the benefits, this project is designed to implement a sustainable
practice. By taking care of one of the stress factors in our employees’ lives, they
can focus on their jobs which then in turn allows for higher productivity.

Problem / Necessity
1 Blizzard Entertainment is an American video game developer and publisher located in
Irvine California. The company lists these eight core values on their mission statement
page: Gameplay first. Commit to quality. Play nice; play fair. Embrace your inner geek.
Every voice matters. Think globally. Lead responsibly. Learn and grow.

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Blizzard Entertainment needs to implement on campus housing as an option to
our employees to increase productivity in the company and reduce employee
turnover. The main reason our employees are leaving our company is due to the
high cost of living in the surrounding area compared to their salary. Unless if you
are an executive or holding a high position in the company, the average
employee’s salary ranges from approximately $34,727 per year for a job such as
a Customer Service Representative, to $135,676 per year as a technical lead like
senior developers, or senior programmers with the average being around
$85,000.

The cost of living for Irvine, California and the USA is shown in the table below.
A cost of living index below 100 means Irvine is cheaper than the US average
and a cost of living index above 100 means Irvine is more expensive than the US
average. According to the graph, at 456, housing is the biggest factor in the cost
of living difference between Irvine, California and the USA. Due to this problem,
our employees tend to either live in communes or further away from Irvine to
reduce their housing expenses, which increases their time commuting to work.

Cost of Living for Irvine, California and U.S.A.

Miscellaneous

Transportation

Utilities
Cost of Living

Housing USA
California
Health
Irvine

Grocery

Overall

0 50 100 150 200 250 300 350 400 450 500


Scale

100=National Average

Project Description
The Plan

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The purpose of this project is to provide housing options to our employees who
are in need of it. This will require us to invest a hefty amount into construction
plans and benefiting in the long term. I propose 500 units that are 600 square
feet each. The space will include a bedroom, living room, kitchen, and bath.

Who This Will Impact


It is expected that this project will impact our financial department the most.
Being located in the city of Irvine, housing is not cheap. When committing to the
building of this project, it is expected that the construction process will be
expensive. Details about the costs will be outlines in the Cost Analysis Section.
Our employees are also going to be impacted as well. They are the ones that
this project was designed for and once completed, will be the ones to relay the
results.

How This Will Affect the Company


Currently, our employees are living in communes or further away from Irvine to
reduce their housing expenses which increases their time commuting to work.
According to Justin Harlem, who is a public affair professional, studies have

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shown that as workers are forced to live further from their workplace, their
productivity declines. To put this into perspective, our employees who are
commuting from their house to Blizzard Entertainment are commuting distances
as far as San Francisco to San Jose. What is normally an hour’s drive is now
easily two hours during rush hour in Irvine due to the dense population. Around
80% of people living in Irvine commute to work by driving their cars with the
average transportation cost for a person living in Irvine being around $23,437.
With on campus housing, we can reduce employee commuting costs to near
nothing since they can now have the option of walking to work. And by walking,
we can reduce our employees carbon footprints as well.

As stated by Mr. Harlem,


replacing an employee can Cost of Replacing Employees
cost as much as 150 percent
of their annual salary in lost An Employee's Salary Cost of Losing An Employee

revenue from separation pay,


High-Pay $100,000
replacement costs and $150,000
reduced productivity. For $50,000
Mid-Pay
example, losing an employee $75,000
that is being paid $50,000 Low-Pay $30,000
$45,000
annually can cost us $75,000
in revenue. Employer-
assisted housing programs help build employee loyalty and increase productivity
through improved morale, an enhanced employee work/life balance, and
decreasing days of employee absences. The constant turnover of employees is
costing our company revenue as we continue this cycle of hiring employees only
to have them leave due to their housing expenses. Offering housing to our
employees will not only encourage them to work with us but also entice them to
stay long-term with our company. On campus housing is a great opportunity for
co-workers to connect. Living in a community where people share the same
values and visions for their jobs encourages people to work hard. At Blizzard
Entertainment, with on campus housing, our employees who are passionate
about video games can focus on their jobs and decrease their stress about their
housing and transportation. According to Paul Slezak, increasing our company’s
productivity by 10 percent can increase profits by $2,400 per employee per year.

The unavailability of affordable housing can make it difficult for companies to


attract quality employees. But by offering on campus housing benefits, we would
be able to set ourselves apart from our competitors, encouraging quality
employees to work with us. Eliminating the stress factor of commuting to work
and spending their salary on housing far away from the company encourages
potential employees to consider us over other companies. We already have an

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amazing work culture that everyone enjoys, so why not set ourselves even
further than our competition?

Cost Analysis

o The average cost per square feet of construction in Irvine is $163.51.

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o For large buildings of about 300,000 square feet, it takes about a year to
build if the weather goes according to plan.

o Increase productivity by 10% can increase profits by $2,400 per employee


per year.

Return on
Activity Money Time Investment

Construction ~$50 million ~1 year $1.2 million

Assessment Strategy
Immediately following the completion of the on-campus housing buildings, it is
expected that our employees will compete to claim a unit. Overtime, we will
measure the productivity of our employees by referencing the revenue earned
each year. We will also measure the employee turnover rate yearly to see if the
project has indeed increased employee retention.

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Conclusion
To increase Blizzard Entertainment’s employee retention, I propose building an
on-campus housing building as a solution. By doing so, this will reduce our
employee’s commuting times and eliminate their carbon footprints. This will also
reduce the employee turnover which will cut our costs of hiring and losing
employees. Finally, quality employees are more willing to work with us if we offer
housing options. Encouraging our employees to put down roots in the
community is a matter of putting forth a little money and a lot of creative effort. In

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all cases, the benefits of increased employee loyalty, reduced carbon footprints
and productivity far outweigh the costs.

Appendix
TO: Employees
FROM: Nicole Nguyen
DATE: February 26, 2019
SUBJECT: Implementing On-Campus Housing

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The Milwaukee Business Journal claims that research shows those who own
homes often work harder and longer for their employer. They are less willing to
uproot themselves and their families for a different job and more willing to go the
extra mile to help their company grow and succeed. Employees who own homes,
lay down roots, start and support families, and become part of a community
quickly realize that hard work gives them the means to make home payments,
make home improvements and move toward financial security.

As you may know, the project to build on campus housing is underway and I
wanted to let you know why you should be excited for this development! Due to
the high cost of living in Irvine, we have decided to build 500 units on campus for
our employees to live in. This would mean reducing commuting times,
reducing our carbon footprints and increasing our productivity within the
company. Living together with your co-workers who share the same love of
video games as you is bound to make us a closer-knit community.

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