Reference no: EM132270954
Managing Employee Benefits: Strategic Benefits Planning at Makers Craft
Makers Crafts is facing strong competition in the retail craft chain-store market. Easy Crafts, a new discount craft-store chain, is opening stores in many of Makers Crafts’ market areas. Makers Crafts has been a leader in the craft supply marketplace due to the company’s superior customer service provided by a well-trained and compensated retail staff that are experts in crafts. Customers have enjoyed the opportunity to gain advice and ideas from the company’s talented workers over the years, and customers are loyal to the committed staff. However, the new discount chain is drawing away customers by recruiting the experienced staff from Makers Crafts. Adding experienced staff to the lower prices at Easy Crafts is quickly drawing business away from Makers Crafts, and company executives are concerned.
The sudden employee attrition at Makers Crafts is a top priority for new Director of Human Resources Latonya Thomas. Her initial evaluation of the situation suggests that the company needs to examine its benefit offerings. Makers Crafts has done well at recruiting and training staff; however, little attention has been paid to the company benefits offerings to complement the competitive employee pay. While the company pays its employees above market-average wages, it has slowly changed benefits offerings in response to cost concerns. In the last five years, employee contributions to health-care premiums have increased, and the company has scaled back its contribution to the employee retirement plan. While these changes have helped the company control benefit costs, the changes have led to frustration by the employees.
Easy Crafts has capitalized on employee dissatisfaction at Makers Crafts by offering a generous benefits package to draw away workers. The frustrated employees that have moved to Easy Crafts have accepted minor pay cuts in exchange for benefits that better meet their needs. For example, many of the company workers are older, and their concerns about retirement benefits in particular are more pronounced as they know retirement is not far away. Part of Easy Crafts’ strategic planning process to grow its market share included determining the types of benefits that would be attractive to these workers. Thus, Easy Crafts offers a retirement plan that provides more significant contributions by the company than Makers Crafts’ plan provides. Given the successful recruitment of so many Makers Crafts workers, it seems that Easy Crafts’ planning was effective.
Latonya knows that the company needs to make some changes to its benefits plan. However, she also knows that it is important to not make any hasty decisions in response to this challenge. Latonya needs to begin collecting information in order to start the planning needed to determine appropriate changes to Makers Crafts’ benefits plan.
What kind of strategic planning approach is Latonya taking for Makers Crafts? Is this an effective approach?
What kind of information does Latonya need for the strategic benefits planning process for Makers Crafts?