Case Study: Managing Employee Benefits: Expanding Internationally at Suds Microbrewery
Director of Human Resources Ellie Gomez at Suds Microbrewery has helped success- fully open 20 new brewery locations across the United States in the past 10 years. Suds Microbrewery is a successful chain that was started with one location in the Midwest and quickly grew. The company brews several variations of its award-winning beers at each location and ships them to restaurants and retail outlets within a short radius of each brewery. Thus, company growth requires opening new breweries. Suds Microbrewery had success in the 20 major markets that it has entered thus far in the United States, and the company is now ready to expand internationally. The company’s market research has identified Canada and the United Kingdom as the company’s first international locations. While Ellie is now an expert in opening a new location, she knows that hiring employees in different countries will create a lot of new challenges.
The company has secured locations in Toronto and London, and Ellie is in the process of determining the staffing plan for each new brewery. While a staff from another brewery will help open the new locations and train the new employees, Suds Microbrewery plans to hire local employees to staff each brewery. Ellie has a lot of research to do to understand local labor markets and how to recruit the right staff, but she knows the total compensation package that the company offers will be important. She has started to explore local pay rates but needs to also outline the employee benefits package to offer at each location. This is a new challenge for Ellie, as all the company’s U.S. locations have the same benefits package.
The U.S. locations offer standard benefits to all full-time employees. The U.S. benefits offerings include a company-paid health insurance option, which employees can enroll in after one month of employment. To support the retirement savings of workers, the company offers a 401(k) retirement plan with a match of employee contributions of up to 5% of an employee’s annual pay. The employees also receive a six paid vacation days plus seven paid holidays each year.
Ellie knows that it is important to establish a benefits package that is not only comparable to the U.S. benefits offerings, but also is competitive with the benefits offerings of competitors in the local markets where the new breweries will open. Several of the employees at the new locations, managers in particular, will be communicating with employees at U.S. locations and thus they will have an opportunity to compare benefits. Ellie is aware, however, that employee benefits practices are generally different in these countries from those in the United States. In particular, health insurance, retirement benefits, and time-off requirements may be regulated by law. Before Ellie can begin to make recommendations, she must first conduct research to understand what is required in each country and how the requirements compare to Suds Microbrewery’s current offerings.
1. What are some challenges that Ellie is going to face in creating the new benefits pack- ages for the international locations?
2. What are some general recommendations for Ellie as she plans these benefit offerings?
1. Ans: Companies that have cross country operations tends to face these challenges as Ellie has faced. Part of it is also due to Suds Microbrewery is a completely new to global market or in other words new in exandin its branches across borders.
As mentioned in the case Ellie shall face the compnsation package building for new locations. In order to hire and retain top skill labors, Ellie has to offer a very good competitive compensation package in its new locations. Suds Microbrewery currently offers uniform compensation package to its employees in all the branches across US. It offers a standard benefit of company paid health insurance, Retirement benefits,six paid vacations and seven paid holidays each year. Ellie is aware that employee benefit practices are different in UK and Canada. Prticularly Health insurance, retirement benefits and paid holidays etc can be law regulated.
2.Ans: Ellie has to do a thorough research on the company law and regulations of these two new countries. She can first build a demo structure and study it . Additionally she will have to also do a research on how other similar companies are offering their compensation packages etc.