World Measurement Your Turn
1. Cost out these packages given the data in Exhibits 1 and the information obtained from various insurance carriers and other information sources (Exhibit 4).

Given the data in Exhibit 1, World Measurement would save the following:
10% on Life Insurance premiums, death benefits, hospital etc. Their total cost per employee per year would go from 1427.00 to 1284.30.
15% on Dental Insurance. Their total cost per employee per year would go from 51.00 to 43.25
By requiring a probationary period before eligibility World Measurement would save:
10% on Discounts on goods and services. Their total cost per employee would go from 27.00 to 24.30
15% on Employee Meals furnished by the company. The company does not pay anything for this benefit.
10% on Contributions to employee thrift plans. Their total cost per employee would go from 71.00 to 63.90
By improving claims processing World Measurement would save:
8% on Unemployment Compensation. Their total cost per employee would go from 292.00 to 268.64
4% on Workers’ Compensation. Their total cost per employee would go from 311.00 to 298.56
1% on Long Term Disability. Their total cost per employee would go from 57.00 to 56.43
If all of the cost saving strategies in Exhibit 4 are implemented World Measurement would save a total of $196.62 per employee per year.
2. Which package should you recommend to Jacobs? Why?

In terms of the packages presented I would recommend Option 2 to Jacobs. I say this because although Option 1 would save more money, I think that the employees would have less of a negative reaction with Option 2. Pension benefits, hospitalization benefits, and holidays are ranked very high in terms of importance to workers. If those benefits are changed so drastically, the company may have a hard time retaining its current employees or morale may be decreased