Benefits and Strategic Planning
Benefits and Strategic Planning
Makers Craft 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 the same markets. Makers Craft has always been considered a leader in the market due to their high quality of products and their well trained and compensated staff that are experienced 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 their staff. However, the new discount chain is drawing away customers by recruiting the experienced staff from Makers Craft. Adding experienced staff to the lower prices at Easy Crafts is quickly drawing business away from Makers Crafts and executives are concerned.
The sudden employee attrition at Makers Craft is a top priority for new Director of Human Resources Latonya Thomas. Her initial evaluation of the situation suggests the company needs to examine its benefits offerings. Makers Craft 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 does pay its employees above average wages, it has slowly changed its benefits contributions in response to cost concerns. In the last 5 years, employee contributions to health care premiums have increased, and the company has scaled back its contributions to the employee retirement program. While these changes have helped stabilize Makers Crafts in an uncertain economy, the changes have led to frustration by employees.
Easy Crafts has capitalized on the employee dissatisfaction by offering a generous benefits package to draw Makers employees. The frustrated employees who have migrated to Easy Crafts have accepted minor pay cuts in exchange for a more rich benefits platform. For example, many of the employees are older and their concerns about retirement benefits are more pronounced as they know that retirement is not that 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 the Makers Craft workforce. The Easy Crafts retirement plan provides a more significant employer contribution. Given the success of recruiting the Makers Craft workforce, it appears the Easy Crafts planning was effective.
Latonya knows that the company needs to make some changes to the benefits plan; however, she also knows that it is important not to make any hasty decisions in response to this challenge. Latonya needs to begin collecting information in order to start the planning process needed to determine the appropriate changes to Makers Craft benefits plans.
1. What type of strategic planning approach is Latonya taking for Makers Craft? Is this an effective approach?
2. What type of information does Latonya need for the strategic benefits planning process for Makers Craft?
3. If the executives allow Latonya to provide a more rich benefits platform in exchange for freezing wagejvzs, should Latonya support that?
