Why Wal-Mart’s (WMT) new employee benefits will help its image
Posted by: in Stocks Money NewsFiled under: Good news, Wal-Mart (WMT), Employees
As my colleague Doug McIntyre noted yesterday, Wal-Mart Stores, Inc. (NYSE: WMT) has furnished the world with details on how it is improving health insurance benefits for its million-plus U.S. employees. After years of of tussling with unions, the media, employees and just about anyone else about how it so “shabbily” treats employees when it comes to benefits, it wants the world to know what it’s up to.
Now, Doug’s right about this benefit increase costing Wal-Mart — it will. In fact, it could not have come at a worse time, as Wal-Mart seems lost and misguided even as it has become the world’s largest retailer by revenue. Sales in the U.S. are flat and the company’s image (like it has been in the last year) is swirling in the toilet. So, for Wal-Mart shareholders, capital expense increases are probably not what needs to show up on the company’s books right now.
On the other hand, marketing rules the world (not product quality), so Wal-Mart’s attempt to give its employees over 50 ways to customize medical coverage along with free spousal coverage and $4 generic drug copays will probably increase its image with the Bentonville bashers out there. I’ve not seen every detail yet, but such expansive health care options are really hard to find, even at many Fortune 500 companies.
Will Wal-Mart see an improved public image due to the benefit changes? It should, as it at least deserves recognition if not minor applause here. Whether that image brush-up changes into revenue gains is anyone’s guess. But, if you’ve left Wal-Mart for greener shopping pastures due to the way employees are treated, will this move get you back in the door any time soon? If so, then mission accomplished for Wal-Mart.
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