Paper, plastic or voluntary benefits? How Hy-Vee retains part-timers

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What do you do to try to put a dent in the notoriously high turnover rates of part-time employees in the retail sector when more than three-quarters of your employees are part-timers? If you’re Hy-Vee Inc., a regional supermarket chain with around 250 stores in the Midwest, you introduce a suite of 11 voluntary benefits on a sophisticated enrollment platform.

Upon announcing the program, Hy-Vee described the program as “unique in our industry and differentiates us from other retailers.”

A key component of the private exchange platform, created by online insurance marketplace vendor Connecture, is its part-time employee profile segmentation that helps guide Hy-Vee’s diverse workforce to benefit options that might be most applicable to them. It’s intended to be an intuitive platform that uses smart features to guide benefit selection, according to Connecture.

“We recognized that you can’t label part-timers as a homogenous group,” says Michael O’Donnell, a senior VP at Midwest Heritage, a Hy-Vee subsidiary that provides insurance brokerage services to its parent company and other employers.

Some 65,000 of Hy-Vee’s 85,000 employees are part-timers.

While many part-timers are young and single, many are also married or single with dependent children, as well as Medicaid- or Medicare eligible. Some have spouses who work full-time elsewhere and have standard benefits package, and others don’t. Hy-Vee created six demographic profiles to help part-timers start their customized online benefit shopping experience and zero in on the most appropriate options.

As part-timers shop for benefits on the platform, the system gives them a running total of the per-paycheck deductions they will incur to pay for selected benefits.

The West Des Moines, Iowa-based retailer, in conjunction Iowa-based bank Midwest Heritage, launched the suite of benefits at the beginning of the year, and is already planning program adjustments for 2019, possibly adding more benefits to the current 11. (Hy-Vee owns Midwest Heritage, which also offers employee benefits.)

Part-timers at least 19 years old can purchase health (both ACA-compliant and a “mini-med” plan), dental, disability (short and long-term), vision, life (group and individual), accident, critical illness hospital indemnity, disability, vision, homeowners, renters, and pet insurance. Other services, like banking and investments via Midwest Heritage, are also marketed via the platform.

“We had been talking for years about a ‘total workforce solution’ to help in this tight labor market,” says O’Donnell. Some 2,000 eligible part-timers browsed the platform during the open enrollment period, although not all of them ultimately purchased any of the coverage options.

O’Donnell said the Hy-Vee program met its initial goals, and expects it to pick up steam in the next enrollment cycle. The planning for the 2018 benefit program didn’t begin in earnest until last September, so “there wasn’t a ton of time for communication,” explains Susan Plumer, VP of Sales for Connecture.

Communicating with part-time employees working in various shifts in hundreds of locations is always a challenge, even with the benefit of web-based systems. And “not all of these people have access to e-mail,” Plumer says.

A key communication strategy

HR managers at the store locations were trained in how to explain to the company’s 65,000 part-time workers how the “Hy-Vee Part-Time Smart Choices Marketplace” works. In-person presentations, brochures, webinars, and website promotions were among the communication methods used.

But given the high turnover rates in retail, communicating the Smart Choices program is in part an ongoing effort. Hy-Vee’s hope is for new hires (and prospective part-timers) to learn about the voluntary benefit offering prior to open enrollment.

Hy-Vee’s basic contribution to the benefit suite is the enrollment technology itself and competitive pricing available via the group platform. Part-timers do understand they’re on their own in paying for the benefits, O’Donnell says. Part-timers are, however, also bonus-eligible, accrue for paid vacation time, and can participate in the company’s 401(k) program.

Veteran Kansas City-based retail industry consultant Paul Adams sympathizes with the hiring and retention challenge that most retailers are facing today. He also notes, however, that employee benefits and other forms of pay only go so far.

“Everybody’s got a ‘help wanted’ sign out today,” he says, adding, “But beyond compensation, there are intangible reasons that keep people in these jobs longer.” Those include the work environment, and employees feeling they are functioning well within a team, Adams adds. In a positive work environment, extras like voluntary benefits “can be the icing on the cake.”

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Employee relations Voluntary benefits Employee turnover Employee communications Employee engagement Employee retention