Some Retailers Cut Hours and Benefits, Others See Opportunity With Obamacare
Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints website.
Website issues aside, while much of the publicity regarding Obamacare has centered around companies cutting back hours and reducing health care benefits for employees, there has been a wide range of responses among retailers as they scramble to meet the requirements of the Affordable Care Act (ACA).
Some, such as Walmart, announced that they would move a number of part-time employees to full-time status and offer benefits. Others, including Forever 21, reacted by cutting hours to bring more workers to part-time status where they would not have benefits.
Trader Joe’s and Home Depot are among the retailers planning to use the public exchanges for health care coverage for their part-time workers.
Still others, such as pharmacy retailers CVS, Duane Reade and Walgreens, view the ACA as an opportunity to increase customer interactions and provide additional services.
While retail has garnered much of the media spotlight, some experts do not expect the ACA to impact retailers to a greater extent compared to other business segments.
"In the end, the economics are such that all employers will want out of health insurance; they just haven’t found a way," said Gene Detroyer, an independent consultant.
David Livingston, principal of DJL Research, outlined a few key concerns for retailers when it comes to the ACA:
- Will it be cheaper to just give employees a subsidy and have them buy insurance on their own?
- Will morale be affected by employees having to find doctors that take Obamacare or having to pay more to keep their current doctors?
- Is Obamacare going to be a distraction?
Mr. Livingston said some retailers may see their health care strategy impact their ability to attract key workers, but he doesn’t expect a huge talent drain.
"Retailers will always pay good wages and benefits for top talent. Those with the ‘warm body’ part-time labor model will still be hiring part timers with minimal hours."
While retailers will experiment to find the right mix of part- and full-time workers, Ryan Mathews, founder and CEO of Black Monk Consulting, doesn’t expect a huge shift.
"I think the whole ‘all employers will fire all full time workers’ rhetoric is just anecdotal right wing knee jerkism at its worst," Mr. Mathews said. "To date I haven’t seen any objective research to indicate a radical restructuring of the workforce is occurring or will occur in the future. What is happening is that some retailers are creating options that never existed before. But when Walmart — the largest retailer in the world — goes on the record saying they don’t think implementation will be a problem, I think that renders the whole ‘this will destroy retail’ discussion relatively moot."
Are you more or less optimistic about the implications of the Affordable Care Act (ACA) on retail today versus six months ago? What do you think the net effect will be on retailers’ and part- and full-time store associates? What advice would you give retailers?