Wal-Mart (NYSE: WMT) is going to improve the packages of healthcare options [subscription required] that if offers its employees in the U.S. The big retailer will allow its workers to tailor plans on both a payment and deductible basis depending on the employee's anticipated needs. Spouses will also be covered without extra charges.
According to The Wall Street Journal, "the changes will boost the costs Wal-Mart incurs on a per-employee basis for health-care coverage." That will not be welcome news to investors who have watched the stock drop to a 52-week low as same-stores sales in the U.S. have fallen to 1% or 2% and operating margins in its domestic market have hurt overall Wal-Mart results.
The new programs are an indication of the fine line that the world's largest retailer has to walk. An unhappy employee base in the U.S. may well make it harder for the company to turn around sales here. But, how far does a happy employee go in improving customer experience, cost controls and better merchandise selection? Since there is not hard measurement, employee satisfaction is a "soft" number when Wall Street looks at the situation.
Wal-Mart has made a lot of missteps in the U.S. Raising its costs for employee healthcare may be another one.
Douglas A. McIntyre is a partner at 247wallst.com.
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Reader Comments (Page 1 of 1)
9-19-2007 @ 10:13AM
Alouisis said...
I'll believe it when I see it. If past is a clue to future Walmart actions, this is likely to be a cosmetic PR initiative with no real substance. Still, I will withhold judgement till I see the facts. I'm just distrustful of Walmart and rightly so.
9-19-2007 @ 10:49AM
Ellen said...
Walmart is not the only culprit. AMF (the bowling corporation) offers its employees insurance that pays a maximum of $35/month for prescription reimbursement, and a pitiful maximum yearly health benefit. A one day stay in hospital would wipe it out, and the prescription benefit wouldn't pay for an antibiotic. Its pathetic what they get away it.