Will part-timers flock to Lidl after grocer offers health insurance for all?

Discussion
Photo: Lidl
Oct 09, 2019
George Anderson

German grocer Lidl’s initial entry into the U.S. in 2017 may not have been as smooth as hoped for, but the 70+ store chain is opening new stores and reports suggest that management is figuring out what it takes to succeed on this side of the Atlantic.

One key to success that Lidl undoubtedly knew before coming to America is happy associates. Now, the chain is giving its workers another reason to feel good about their place of work. Lidl announced that it will allow all associates, regardless of the number of hours they work on a weekly basis, to participate in the company’s health insurance plan beginning in January. Around 1,200 part-timers will be eligible to buy into the company’s medical coverage at that time.

“We want our team to have the peace of mind knowing they have healthcare coverage,” said Roman Heini, chairman of Lidl US, in a statement. “Giving team members working part-time at Lidl access to medical benefits is incredibly important and it will help them succeed. As we continue to expand, we are committed to supporting all our employees so they can be at their best.”  

Lidl’s announcement comes at a time when others in the grocery space are looking to limit medical benefits for employees. Last month, Whole Foods Market announced that employees working fewer than 30 hours a week would no longer be eligible to buy into the company’s health insurance. The previous requirement for associates to participate in the plan was 20 hours. The Amazon.com-owned company said about 1,900 workers would be affected as a result of the change. 

Lidl expects to invest up to $9 million in the first year of its health plan initiative, with the investment growing as it continues to expand its operations in the U.S. In addition to medical benefits, part-timers working less than 30 hours per week will be able to receive dental and vision insurance. 

DISCUSSION QUESTIONS: How important will Lidl’s medical benefits program be as a recruiting tool for new employees? Is it a wise competitive move considering that many grocers are trimming costs by scaling back on health insurance?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"This is a differentiator and helps raise the bar in a tight labor market."
"Until they release the actual plan with a clarification of what the employee share percentage is, it is hard to determine if this is a game changer or a media blitz."
"It is an incentive long overdue in the retail sector as a competitive edge. It will be seen as a recruiting tool that may become standard."

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9 Comments on "Will part-timers flock to Lidl after grocer offers health insurance for all?"


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Neil Saunders
BrainTrust

This is a differentiator and helps raise the bar in a tight labor market. Lidl can likely afford this as it is both investing in the U.S. market and has a pretty efficient model that drives profit. That said, it needs to drive volume through the business to make the economics work. At present, it is not doing as well in the U.S. as anticipated; correcting this is critical if benefits like healthcare are to be sustainable.

David Weinand
BrainTrust

If they can make the math work, I think this is a huge competitive advantage in recruiting quality store employees. With U.S. healthcare being twice the cost of any other first world country, the move to offer some level of coverage to part-time and full-time employees in this category should be a deciding factor for those looking to decide between companies. The only thing not detailed is how much coverage is offered and what is the responsibility of the employee (e.g. is coverage going to be 40 percent of a paycheck?).

Tony Orlando
BrainTrust

My question is, what type of healthcare? Is it a 50/50 split in the cost? If so, some employees probably cannot afford the premium, let alone the high deductible on most plans. Add in vision and dental and you have a great package, but there are no details on the cost. It is a noble idea from Lidl and, if it has a comprehensive package that is affordable to the employees, then yes it will attract new recruits. But until they release the actual plan with a clarification of what the employee share percentage is, it is hard to determine if this is a game changer or a media blitz.

Frank Riso
BrainTrust

It is an incentive long overdue in the retail sector as a competitive edge. It will be seen as a recruiting tool that may become standard. Recently it has gotten very difficult to hire in just about every sector of retail. Healthcare could be the one factor to tip the scales. It may only be a temporary benefit if Congress ever does anything on healthcare but until then it is a competitive advantage. I also think they need to weigh the cost of recruiting with the cost of healthcare.

Kevin Graff
BrainTrust

Retailers are slowly waking up to the importance of staff in this new age of retail. The variance range in performance on product, price, marketing, store design, etc. between retailers is very small. However, the variance range in performance with staff is ridiculously large. Putting staff on the top of the priority list will always pay dividends.

On that note, Whole Foods (OK, Amazon really) took another step in the race to the bottom with their latest move in taking away benefits. How long before they strip away everything that made Whole Foods a distinctive concept?

Richard J. George, Ph.D.
BrainTrust

Flock may be a strong descriptor. However, given the recent pull back in benefits by Whole Foods, this certainly will give Lidl a much needed competitive advantage, as it attempts to grow in the US market. In addition, this benefit should attract a better talent pool, perhaps enhancing the Lidl shopping experience for its customers.

Paco Underhill
BrainTrust

Good move. Like Walmart’s venture in in healthcare coverage, this is an important evolution in American industry. Let’s see how Lidl can control costs and pass that saving onto the single mom working 25 hours a week.

Craig Sundstrom
Guest

Well it sounds good, but of course details matter. “Buy into the company’s medical coverage,” I think is the key, since if it means a $1000/mo part-time worker is “allowed” to buy a $2000/mo plan, the “benefit” may not mean a whole lot. So how this is administered will count a lot in how significant its value as recruiting tool is.

Shep Hyken
BrainTrust

This a great benefit to employees, and will attract top applicants, regardless of part-time or full-time. A retailer can invest in many areas. Investing in people is one of the easiest opportunities with potentially some of the biggest ROI.

wpDiscuz
Braintrust
"This is a differentiator and helps raise the bar in a tight labor market."
"Until they release the actual plan with a clarification of what the employee share percentage is, it is hard to determine if this is a game changer or a media blitz."
"It is an incentive long overdue in the retail sector as a competitive edge. It will be seen as a recruiting tool that may become standard."

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