Employee Benefits Proposal Report for AKD Textiles, Arkansas Plant

This report presents an employee benefits proposal for AKD Textiles, a company expanding its operations to Arkansas. The proposal outlines a comprehensive benefits package within a budget of 35% of the average wage. It includes required benefits such as Social Security, Medicare, Unemployment Insurance, Workers’ Compensation, and Pension, along with optional benefits like holiday, sick leave, vacation, medical insurance, and various insurance programs. The author proposes standardized costs based on market demand, with adjustments to reflect current economic conditions and employee needs. The rationale for each benefit is provided, along with a detailed breakdown of the cost analysis, comparing existing costs with proposed adjustments. The report emphasizes the importance of employee benefits in retaining talent and fostering a healthy work environment, ensuring a competitive and attractive employee compensation plan.

Surname 1
Student’s Name
Instructor’s Name
Course Date
Employee Benefits
Purpose of employee benefits
Provision of employee benefits is necessary because it shows the commitment of the
management in investing in its workers. This gives the employees some hopes of the
company assuring them of a better future. The benefits are essential to safeguard the health
and the social being of the employees, thus helping the company to retain some talents and
skills that will benefit the business. The retention of expertise and ethical attitudes in the
organization will probably create a healthy culture that is geared towards business success.
However, giving some benefits to the employees reduces the company's expenditure on the
health program of the workers because healthy workers mean effective performance.
Although some benefits are secondary, others are primarily important for the promotion of a
pleasant working environment. I propose that the provision of the employee benefits shall be
based on the nature of the contract and the level of salary and employee gets. For instance,
the longer the contract, the more the benefits one gets.
I propose the following rates of the benefits.
Minimum; $ 4.55 x 35% = 3.85 x .35 = $1.5925
Maximum; $13.00 x 35% = 13.00 x .35 = $4.5500
Required benefits
Social Security, Medicare, Unemployment Insurance, Workers’ Compensation
Pension, Holiday, Sick Leave, Vacation, Medical Insurance, Long Term Disability Insurance,
Group Auto Insurance, Prepaid Legal Services, Employee Meals Provided Free, 100%
College Tuition Reimbursement, Discounts on Company Produced Goods, Recreational
Program, Employee Assistance Plan (EAP), Credit Union Facilities, Child Care Center profit

Surname 2
sharing, bonuses, stock options and maternity leave. When a legal benefit is necessary
according to the company laws, the benefit ought to be included on these benefits.
Human Resource Management / Benefits Proposal
Benefit Cost Converted
COST Proposed COST
Social Security 7.20% 2.5200% 8.2
Medicare 2.45% 0.8575% 6.5375
Unemployment Insurance 6.00% 2.1000% 7.78
Workers’ Compensation 1.50% 0.5250% 6.205
Pension 5.20% 1.8200% 7.5
Holiday (per holiday) 5.86cents 2.051 2.096
Sick Leave (per ill day) 5 cents 1.75 1.795
Medical Insurance (without RX coverage) 55.55
cents 19.4425 19.4875
Drug Insurance (RX coverage) Program 30.35
cents 10.6225 10.6675
Dental Care Insurance 8.7 cents 3.045 3.09
Vision Care Insurance 3.66
cents 1.281 1.326
Long Term Disability Insurance 1.68
cents 0.588 0.633
Life Insurance Program (3 years salary) 7.35
cents 2.5725 2.6175
Group Auto Insurance 6.35
cents 2.2225 2.2675
Prepaid Legal Services 1.2 cents 0.42 0.465
Christmas Bonus 3.3 cents 1.155 1.2
Employee Meals Provided Free 0.35
cents 0.1225 0.1675
100% College Tuition Reimbursement 1.87
cents 0.6545 0.6995
Discounts on Company Produced Goods 1.2 cents 0.42 0.465
Recreational Program 0.45
cents 0.1575 0.2025
Employee Assistance Plan (EAP) 4.25
cents 1.4875 1.5325
TOTAL 84.9345 cents
The rationale for the choices
The proposed costs of the benefits are standardized based on market demand. However, the
general increase in the recommended price of social security is to boost confidence in the
surety of personal safety. The medical cover is increased to meet the current high bills of

Surname 3
Medicare. The number of days for holidays have to be reduced to one month with additional
pay of 0.875%. The reduction in the number of days is to minimize the expenditure.