Question

1. Your company is considering hiring several interns to perform tasks that are now performed by your current office workers: light filing, photocopying, basic customer service emails, etc. Your current staff performs, aside from these simple tasks, more complicated (and more profitable) tasks that interns would not be qualified to do. The accounting department at your company does not want to hire interns since your current staff is performing these tasks anyway, and hiring interns would add unnecessary costs. As the economic consultant, how would you assess the proposal to hire interns?

Answer 1

The opportunity cost of current office staff for doing mundane office tasks is very high when compared to prospecctive payouts to interns.

Freeing up the present expert office staff from these trivial jobs by deploying interns on the same, would empwer the present officers from taking up more of complex tasks where there expertise is required. In case there are no more complex tasks, some higher paid present officers could be separated, if need be (as productivity per existing employee increases).

The model of using respective core competencies in backdrop of opportunity costs (as suggested by Ricardo) is expected to unlock substantial value addition to the entity.