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October 28, 2005
Wal-Mart Memo Points to Hiring Healthier Workers

An internal Wal-Mart memo recommends that the company should design all jobs to include some physical activity to attract and retain a healthier workforce and reduce healthcare costs, the New York Times reports.

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The memo outlined three steps the company should consider taking to attract and retain a healthier, more productive workforce.

  • Design all jobs to include some physical activity (e.g., all cashiers do some cart gathering);
  • Offer savings via the company's Discount Card on healthy foods (e.g., fruits and vegetables); and
  • Offer benefits that appeal to healthy associates (e.g., an education
    offering targeted at students)

"It will be far easier to attract and retain a healthier work force than it will be to change behavior in an existing one," the memo said. "These moves would also dissuade unhealthy people from coming to work at Wal-Mart."

M. Susan Chambers, Wal-Mart's executive vice president for benefits, drafted the memo to address Wal-Mart's rising costs of benefits. The newspaper obtained the memo from Wal-Mart Watch, which has criticized the company for its employment practices. When the newspaper contact Wal-Mart about the memo, the company forwarded the newspaper an updated version that Chambers sent to board members.

The memo states that Wal-Mart employees suffer from obesity-related diseases more often than the national population, and that unhealthy workers are more likely seeking a longer career with Wal-Mart than other employees, the newspaper reports.

"The least healthy, least productive associates are more satisfied with their benefits than other segments and are interested in longer careers with Wal-Mart," the memo states.

The memo also noted that rising wages are a factor because they increase lock-step with tenure and drive the costs of benefits.

"The cost of an associate with seven years of tenure is almost 55 percent more than the cost of an associate with one year of tenure, yet there is no difference in his or her productivit" the memo said. "Moreover, because we pay an associate more in salary and benefits as his or her tenure increases, we are pricing that associate out of the labor market, increasing the likelihood that he or she will stay with Wal-Mart."

In the memo, Chambers also recommends that to reduce benefits costs, the company should ask employees to pay more for healthcare coverage of spouses, saying spouses are the most expensive plan members to cover.

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