Improving public relations at Walmart...ps don't tell.

(links from Kevin Drum)

Walmartwatch has uncovered an extraordinarily unflattering memo detailing how to reduce benefits costs to their employees. While there are a few win-win proposals like educating the employees to untilize check-ups and prescriptions rather than emergency-room care, most of the suggestions fall into the "cut benefits" category. Dropping the 401(k) match is a simple cash saver, and the plan to move to "personal health accounts" is interesting. They suggest raising premiums on spousal coverage, because evidently spouses cost more than Associates. They advocate trying to get more part-time help, because their benefits are lower, and pushing the demographics from 10%/90% "high users" to <10%>Over the past 4 years, the average Associate tenure has increased by 0.2 months per calendar year. As a result, more Associates qualify for participation in benefits programs like the profit sharing and 401(k) plan and more paid-time off. An even more important factor is wages, which increase in lock-step with tenure and directly drive the cost of many benefits (e.g., 401(k) is a percentage of wages).

Given the impact of tenure on wages and benefits, the cost of an Associate with 7 years of tenure is almost 55 percent more than the cost of an Associate with 1 year of tenure, yet there is no difference in his or her productivity (Exhibit 2). Moreover, because we pay an Associate more in salary and benefits as his or her tenure increases, we are pricing that Associate out of the labor market, increasing the likelihood that he or she will stay with Wal-mart.

The idea here is that what Wal-mart really wants is a revolving door of low-tenure or part-time employees. Maybe they should just fire everyone after 5 years? I'm particularly interested in the way an average tenure increase of 20-odd days over 4 years is costing them a bundle in vacation time. I guess multiplied by a couple hundred thousand employees it becomes important. It is interesting though, how little they think of their more devout workers.

And the one Kevin Drum / NYT highlights:

Redesign benefits and other aspects of the Associate experience, such as job design, to attract a healthier, more productive workforce.

....

Design all jobs to include some physical activity (e.g., all cashiers do some cart
gathering.)

Offer savings via the Discount Card on healthy foods (e.g., fruits and vegetables)

Offer benefits that appeal to healthy Associates (e.g., an education offering targeted at students)

....It will be far easier to attract and retain a healthier workforce than it will be to change behavior in an existing one. These moves would also dissuade unhealthy people from coming to work at Wal-Mart. Even a modest shift in Wal-mart's ability to attract and retain a healthier workforce could result in significant savings

OK, it's morally reprehensible to intentionally exercise your employees so fat ones won't join you. On the other hand, structuring jobs such that your employees get some exercise does improve their quality of life. If nothing else, exercise is the most responsible way to deter obese employees. The least responsible one I've ever heard was the airline requirement of a high-heeled uniforms for female flight attendants. (rationale: Having smaller and sexier attendants is good for business and costs less in gas. High-heels cause physiological stress in proportion to one's weight, so the requirement of heels guarantees smaller attendants.) At least Wal-mart isn't being sexist.

That having been said, there are positive ways to encourage change. The health care insurer I once had used to give a $300 cash rebate if you phoned them from your gym 150 times a year. (not a huge incentive, but it was enough to cover the gym)

Anyway, some sad insight into how Walmart sees it's employees.

Oh, one final question: if they manage to attract and retain a healthier workforce, aren't they worried about retaining them longer and having to pay for more paid-time off?

UPDATE: I hate the way Blogger formats block quotes.