By Joel Kranc
With 15,000 employees spread throughout the country, Best Buy has its human resources work cut out for it. To make things even more complicated, HR is tasked with addressing the needs of four talent pools – employees of Best Buy, employees of Future Shop, distribution warehouse workers and corporate head office employees.
Drilling that even further, Future Shop employees are commission-based whereas Best Buy employees are paid hourly rates.
When it comes to providing benefits to manage a workforce that dynamic, Best Buy has much to think about. And because retail can be fast moving, the company has asked itself some important questions about benefits.
“With our very decentralized structure, how do we help employees cope with some of the everyday things they face?” said Kelly Cardwell, director of HR at Best Buy.
In 2008, the company went through total rewards focus groups in each of its four categories and began overhauling its benefits plans to address issues of coping, but also issues surrounding employee morale, happiness and needs for the future.
Dollars and cents
Prior to the financial crisis in 2008, companies were thinking less about costs and needs and more about volume.
“When [benefits] programs started, it was ‘the more the better,’” said Marie-Josée Le Blanc, health benefits consultant and partner with Mercer. “The more I can provide, whatever is new on the market, I will add that to my plan – and for 30, 40 years, it has been happening this way.”
Now, says Le Blanc, companies are more cost conscious and are thinking about return on investment. She says companies are looking at it by asking, “Is my investment in benefits worth it and do I get the most out of my plan?” More and more, companies are looking for that balance between cost and good employee engagement/satisfaction.
Greg Caines, partner, Benefits and Health Management Practice with Morneau Shepell in Halifax, agrees. He says employers and HR practitioners have to look at their workforces, in general.
“It starts with a conversation about the client’s needs and priorities from an overall organizational perspective as well as an HR perspective,” he said. “That conversation tends to inform decisions that they make around the benefit plan design, how it is communicated and how they want to engage employees in their ‘benefits experience.’”
He says that HR practitioners have a voice at the finance table and are better able to show the cost benefit to good benefits plans’ ability to increase productivity, employee satisfaction and overall engagement.
Getting it right
Much of what companies are doing now to engage their workforce and provide appropriate benefits is looking at demographics. Cardwell says some of the results coming from its focus groups allow it to provide better benefits for part-time workers understanding the transient nature of retail. Also, providing employee assistance plans (EAPs) to aid with daycare research, for example, has been implemented throughout the country, giving young families the ability to maintain their jobs and have their EAP provider do the legwork.
“We were able to address a wide variety of needs from some of the programs that we did put in place,” she said.
Cardwell further explains that, within retail, employees jump from company to company solely based on hourly wages and their ability to increase salaries.
“But we were looking to say, ‘How do we really bring and tie employees into the organization, how do we help them in their daily lives and how can we compete better than just getting into a bidding war for their hourly rates?’” Answering those questions were the impetus behind Best Buy’s research and changes in benefits.
Expanding on that topic further, Caines says the demographic diversity in the workplace resulting in the need to provide greater choice is driving HR professionals to change the makeup of their benefits plans.
“The traditional ‘one size fits all’ benefits plans do not meet the majority of employees’ needs just given the diversity [in the workplace],” he said. Providing choice and giving employees the ability to shape the plans and “benefits experience” through flex-plans and health spending accounts are a few examples of greater inclusion in the decision making process. He says employees show more satisfaction when given plans they can tailor and have more say in.
Don Cornack, consultant with Investors Group Financial Services Inc., says when putting together a to-do list for plan design, HR professionals would want to put together a statement such as, “What is it that our plan is supposed to be accomplishing, and let’s take an inventory to see if the plan is meeting those objectives.” As part of that analysis, he said, “I think you would want input from owners and senior management, but you absolutely want input from senior employees.”
Finally, he says, talk to the broker or advisor about changing areas that don't work but also see what is happening in the benefits landscape in the market – what is available now that perhaps was not available when the plan was designed.
“We want to turn retail into a career and not just a temporary stopover to your real career,” said Cardwell on Best Buy’s reasoning for taking action on its benefits plans. But, as HR professionals consider their benefits plans and how they can engage employees, they must consult with them, see what their needs are, what the demographics are and allow them the opportunity to participate in the decision-making process. The result will likely be a more engaged and satisfied workforce that appreciates the benefits being provided.