Walgreens slashes benefits after granting $100M in pay raises
- Walgreens is cutting some employee benefits, soon after announcing a $100 million pay raise for its hourly workers, the Chicago Tribune reported. The drug store chain is offering employees different benefits and eliminating health coverage for most of its eligible retired workers, following the wage-increase announcement, which took effect Oct. 1 and is expected to benefit 100,000 of Walgreens' 170,000 workers.
- According to the Tribune, Walgreens is tightening up its paid leave policy, too; starting in 2019, employees must work at least 30 hours a week to qualify for paid time off, when they currently need to work only 20 hours a week. The company is adding a paid parental leave benefit that will offer new mothers and fathers full pay for eight weeks of leave. The benefit is effective immediately.
- Walgreens retirees will continue to receive health coverage through 2019, with the ability to buy coverage at the Walgreens employer rate. The retailer will continue to subsidize retirees' healthcare benefits if they're at least 64 years old as of March 31, 2019, and have worked at Walgreens for at least 24 years, said the Tribune.
It appears that companies are balancing their budgets by shifting benefits strategies following pay increases. Soon after announcing a $15-an-hour wage increase for its workers, Amazon announced it would eliminate bonuses and stock options for hourly staff.
Employers likely need to adjust their total compensation and benefits offerings to remain remain competitive in a tight labor market, which is expected to remain on the same course into next year. Many employers, especially retailers, are offering hourly workers many sought-after benefits, such as paid parental leave and career development opportunities. In doing so, companies aim to attract applicants and reverse high turnover rates, which, along with low wages and poor benefits, have been associated with the retail industry.
To stay competitive while balancing their budgets, employers might have to come up with non-traditional benefits that appeal to workers and address their most pressing needs. Starbucks, for example, is offering caregiver benefits for workers who have an unexpected need for caretaker or emergency services tor children or older family members.