Reference no: EM132274002

Yagan Systems provides a variety of information technology related services including Web hosting, data backup, and Web security consulting. The following is part of a business plan being discussed by the managers at Yagan:

"The package of benefits we offer to our employees needs to be generous enough to attract and keep excellent employees, but our current package of benefits goes too far and should be scaled back. Our current policies were determined when the national economy was doing well and we were losing employees to firms that offered better benefits. Now, however, the national unemployment rate is much higher, and so these generous policies are no longer necessary. Consider also the fact that Yagan offers more paid vacation days than many firms in many other industries. In addition, very few employees who have joined Yagan Systems have ever indicated that the benefits we offer were the most important factor in their decision. Clearly, then, they must have joined for other reasons. If we reduce the expenditure on our benefits packages, we can devote more resources to other priorities, such as employee training. With an increased training budget, we will be able to train our employees to perform higher-value tasks, thereby increasing their productivity."

How persuasive is this argument? In an essay, evaluate the evidence it presents and explain how well this evidence supports the writer's view that 1) the current benefits package should be scaled back and 2) the money saved should be used to increase the training budget. Identify any questionable assumptions and describe what changes or additional information would make the business plan more logically sound.