Sears To Cut Benefits To Compete
By George Anderson
Add Sears to the list of retailers using the low wages and benefits paid by Wal-Mart to its associates as the reason for proposed cutbacks in employee programs.
Greg Lee, senior vice president for human resources, Sears told the Chicago Tribune, “In the world of retailing there are very few competitors with pension plans and retiree
medical benefits. That puts Sears at a disadvantage.”
Sears, reports Bloomberg News, plans to phase out its pension plan, reduce bonuses and eliminate stock options for all except company directors and vice presidents.
It is expected workers under 40 will be shifted from the company’s paid pension plan to self-financed 401 (k) plans. The company plans to increase the hourly rate paid employees
by 20 percent.
In another cost-cutting move, Sears plans to end its subsidies for health care for future retirees. Future retirees from the department store chain will be able to buy coverage
through Sears’ group plan.
Moderator’s Comment: Will Sears be more competitive by making this latest move to reduce company expenses?
We’ve heard so many times that you have to pay to attract talented people. Obviously, Sears feels its employees are not talented enough. Greg Lee’s statement
that by taking care of its employees, Sears was putting itself at a competitive disadvantage, says it all. – George
Anderson – Moderator
- Sears Pares Its Benefits Program – Chicago Tribune
- Sears to start phasing out pension plan, stock
options – Bloomberg News/Baltimore Sun