In the HBR blog post, Google Adds Benefits, Walmart Cuts Them; Oddly, the Logic is the Same, author and professor Peter Cappelli disects the two extremes of the employee benefits spectrum in today’s supposedly profit-driven society. On one hand, we have Google with top chefs and world-class gyms in their offices. On the other hand, we have Walmart’s easily replaceable part-time employees that have zero benefits in their hiring package. Google’s ideology: to keep their workers in the offices to innovate instead of away from headquarters to do daily things, is to maximize growth and therefore, maximize profit. Walmart’s ideology: to hire more part-time workers with little to no benefits, is to minimize cost and therefore, maximize profit.

The reason behind both extremes is the same: to maximize profit. But if we factor in the possible long term costs and human resources issues, is Walmart’s strategy truly effective? Employee retention is often an overlooked topic when it comes to profit maximization. Google’s strategy to “carefully cultivate” its people and culture is actually more profitable in the long run. With lower turnover and more satisfied employees, the company will not only reflect its positive work environment, but costs to replace and train their specially skilled employees will be minimal. With a high turnover rate because of minimal benefits, the training and hiring process will only add to costs, and unsatisfied workers will reflect badly upon the company.

In the end, the overarching goal to maximize profits instead of promoting and improving company culture is a slippery slope. Albeit it may seem the ones in the innovative industries are fairing well, but the problem of inequality in compensation continues to exist and grow. As the gap widens between the two extremes, the ones with cutting benefits will only suffer. Having been on the cutting end with minimum waged part-time jobs, and hoping to be in the benefits end in the future, I certainly hope this problem will resolve with the coming generation’s mindsets.

Researched Links:

http://www.google.com/about/careers/lifeatgoogle/benefits/

http://guides.wsj.com/small-business/hiring-and-managing-employees/how-to-retain-employees/