Page 389 - Business Principles and Management

Unit 4

Businesses and individual
computer users must apply
security measures to protect
data and personal informa-
tion. Have you ever experi-
enced identity theft?

PHOTO: © GETTY IMAGES/PHOTODISC.

HEALTH AND SAFETY Even when employees are absent from work because of sickness
or injury, the company must continue to operate. Other employees must be avail-
able to fill in for the absent employee or the work will go undone. Usually, the
salary of both the absent employee and the substitute employee must be paid. A
share of health insurance costs and other benefits are often paid by the company
as well. Studies estimate that the annual costs to many businesses of employee
absence and health care now exceed 20 percent of the salary paid to each employee.
An employee paid at the rate of $7.00 per hour requires an additional $1.40 each
hour to pay those costs. A person earning $35,000 will add $7,000 or more to the
costs of the business just for health expenses and employee absences.
The increasing cost of health insurance is causing many businesses to increase
the percentage of premiums paid by employees and to drop their insurance cover-
age of part-time employees. Companies are working with insurance companies to
find lower-cost insurance alternatives that may reduce benefits for employees.
Many companies offer no health insurance benefits at all. The cost of health in-
surance is one of the major issues facing business managers and employees today.
Many businesses have found that costs that result from health and safety
problems can be reduced if managed carefully. These companies provide safety
training for all employees. Work areas and equipment are inspected regularly
to make sure they operate correctly and safely. Employees are provided informa-
tion on ways to improve their health. Investments in fitness centers and exercise
programs have resulted in lower costs for the business due to fewer medical
claims and reduced employee absences.

CHECKPOINT
Describe several ways that managers can reduce costs in the
business by paying attention to areas where costs are often high.

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