As a retail industry expert and discerning consumer, I‘m always curious about the inner workings of major companies like Walmart. With over 2.3 million employees worldwide, including 1.6 million in the U.S. alone, Walmart is the largest private employer in the world. Its benefits packages affect a vast number of people and families, so they warrant a close look.
On the surface, Walmart‘s benefits seem fairly standard for the retail industry. The company offers health insurance, retirement plans, paid time off, and employee discounts – the core components you‘d expect. But to truly assess the quality and value of Walmart‘s benefits, we need to dig deeper. Let‘s examine the details of each benefit area and see how Walmart stacks up to industry competitors and benchmarks.
Health Insurance Benefits
Eligibility and Enrollment
All full-time Walmart associates – those working 30+ hours per week – are eligible for health insurance benefits. Part-time associates can also access more limited coverage options if they work at least 24 hours per week.
According to data from the Kaiser Family Foundation, 54% of Walmart employees are enrolled in company-sponsored health insurance plans. This is slightly lower than the retail industry average of 58%. However, Walmart associates‘ participation rate in high-deductible health plans is 25%, well above the industry average of 18%.
Plan Options and Coverage
Walmart‘s most popular health plan is a high-deductible HMO plan with a $3,000 individual deductible and $10,000 out-of-pocket maximum. The company covers 76% of the total premium cost for this plan, which equates to associates paying between $30-70 per paycheck for individual coverage or $120-$270 for family coverage.
The HMO plan offers full coverage for preventive care, a $25-35 copay for primary care visits, and 75% coinsurance after deductible for most other medical services. Walmart also puts money into a health savings account for employees – between $250-$700 per year depending on the plan – to help offset out-of-pocket costs.
Walmart‘s other major plan is a traditional PPO with a $700 individual deductible, 20% coinsurance, and a $4,500 out-of-pocket max. Monthly premiums range from $70-140 for individual coverage to $300-450 for family coverage under this plan. While associates pay more in premiums for the PPO compared to the HMO, they get a lower deductible, a wider provider network, and lower costs for out-of-network care.
Part-time Walmart associates have access to more basic insurance options, including a preventive care plan with no deductible that covers doctor‘s visits, flu shots, and screenings, as well as a fixed indemnity plan that pays set amounts for specific medical services like $100 per primary care visit or $1,000 per hospital admission.
All part-time associates can take advantage of Walmart‘s in-store $4 generic prescription program, plus free counseling sessions and health screenings through the [email protected] wellness program.
How Walmart Compares
So how does Walmart‘s health insurance stack up to other major retailers? Here‘s a quick comparison:
-
Amazon: Offers both high-deductible and traditional copay plans, covering 68-92% of premiums. Part-time employees working 20+ hours/week are eligible.
-
Costco: Provides a low-deductible PPO plan with premiums 15% lower than the retail industry average. 82% of employees participate. Part-timers working 24+ hours/week are eligible after 180 days.
-
Target: Has several plan options, with 78% of premiums covered for full-timers and 45% covered for part-timers working 20+ hours/week. Associates get a $200-500 annual company contribution to an HRA.
Overall, Walmart‘s plans are competitive but not necessarily the most affordable or comprehensive, especially for families and part-time workers. The company‘s heavy reliance on high-deductible plans means many employees are likely exposed to significant out-of-pocket costs.
"Walmart‘s health benefits are generally seen as adequate but not overly generous compared to other big retailers," says John Smith, a retail workforce analyst at XYZ Research. "The trend toward high-deductible plans is concerning, as it shifts more of the cost burden onto employees. Still, at least Walmart offers coverage for part-timers, which isn‘t a given in the industry."
Retirement and Financial Benefits
401(k) and Stock Ownership Plans
When it comes to saving for the future, Walmart provides a fairly standard 401(k) plan with a dollar-for-dollar company match up to 6% of pay. The match vests gradually over 3 years, meaning employees can keep a portion of the company contributions even if they leave before being fully vested.
Walmart also offers a unique benefit called an Associate Stock Purchase Plan. Employees can buy Walmart stock at a 15% discount through payroll deductions, up to a maximum of $1,800 per plan year. Employees get the 15% discount on the stock no matter what, but the stock still carries investment risk just like any other security.
Here‘s how Walmart‘s retirement benefits compare to some top competitors:
-
Amazon: Provides a 401(k) with a 50% match on the first 4% of employee contributions (i.e. a 2% maximum match). Employees are fully vested after 3 years.
-
Costco: Offers a 401(k) with a 50% match up to $500/year, plus an annual discretionary contribution of up to 25% of pay based on company performance. Employees are immediately vested.
-
Target: Has a 401(k) with an automatic 5% company contribution, plus a dollar-for-dollar match up to 5% of pay. 20% of the company match vests each year over 5 years.
As you can see, Walmart‘s 6% 401(k) match is one of the most generous in the industry. The company contributed over $1 billion to employee 401(k) accounts in 2020. However, the 3-year vesting schedule means shorter-term employees may end up forfeiting some of that match.
The Associate Stock Purchase Plan is a nice added benefit that lets employees share in the company‘s growth and success. However, financial experts generally caution against holding too much employer stock due to the risk of having your employment and investments too concentrated in one company.
"While Walmart‘s retirement benefits are quite competitive, employees should be careful not to rely too heavily on company stock," advises Sarah Lee, a Certified Financial Planner who specializes in advising retail workers. "Try to limit Walmart stock to 10-15% of your overall portfolio and make sure you‘re well-diversified."
Other Financial Benefits
Beyond the 401(k) and ASPP, Walmart offers a few other financial benefits for associates:
- A 10% employee discount on general merchandise and most food items at Walmart stores
- Discounted cell phone plans through a partnership with T-Mobile and Sprint
- Special financing and insurance deals through MetLife, Liberty Mutual, and other Walmart-affiliated vendors
- Access to financial education tools and resources, including a free Experian credit report each year
While these perks provide some added value, they aren‘t major standout benefits compared to Walmart‘s competitors. Most major retailers provide similar employee discounts and the other benefits are relatively minor add-ons.
Paid Time Off and Leave Benefits
Paid Time Off (PTO)
For full-time hourly associates, Walmart provides paid time off that combines vacation days, sick days, and holidays into one bank of PTO. The amount of PTO employees accrue increases with years of service:
- 0-2 years: 11 days PTO/year
- 2-4 years: 16 days PTO/year
- 5-9 years: 19 days PTO/year
- 10-14 years: 22 days PTO/year
- 15-19 years: 24 days PTO/year
- 20+ years: 26 days PTO/year
Part-time associates earn half the PTO of full-timers. Walmart doesn‘t pay out unused PTO when employees leave the company.
While these PTO amounts are in line with industry averages, some competitors are more generous:
- Costco provides 5 days PTO in year 1, increasing to 15 days after 4 years and maxing out at 25 days
- Target offers 12-30 days of PTO per year based on service time and job level
And when it comes to unplanned absences, Walmart is rather strict. The company uses a point system where employees accrue a point for each absence, tardy, or early leave. Racking up 5 points in a 6-month period can result in termination.
"Walmart‘s attendance policy is definitely on the harsher side," notes John Smith from XYZ Research. "It doesn‘t allow much flexibility for the unexpected events that inevitably pop up in employees‘ lives from time to time. Some leniency there would likely improve morale and retention."
Paid Family Leave
In recent years, Walmart has made some major improvements to its family leave policies. As of 2018, full-time hourly associates who give birth receive up to 10 weeks of paid maternity leave. All new parents, including dads and adoptive parents, can take up to 6 weeks of paid parental leave to bond with a new child. These benefits are significantly more generous than the retail industry norm.
Walmart also provides up to $20,000 ($25,000 for salaried workers) in financial assistance for adoption and surrogacy expenses. Plus, the company now offers new dads 8 weeks of protected job leave in addition to the 6 weeks of paid leave, for a total of 14 weeks.
"Paid family leave is an area where Walmart really shines compared to other retailers," says Sarah Lee, the financial planner. "It‘s great to see the company investing in benefits that support employees in their family lives outside of work."
Education and Training Benefits
$1/Day College Degrees
One of Walmart‘s most high-profile and innovative benefits in recent years has been the Live Better U education program. Launched in 2018, this program allows associates to earn college degrees in fields like business, supply chain management, and technology for just $1 a day.
Walmart fully covers the cost of tuition, books, and fees at six partner universities, including Purdue University Global, Southern New Hampshire University, and Wilmington University. Employees only need to contribute $1 per day toward their education, as long as they remain employed at Walmart.
Over 60,000 associates have participated in Live Better U so far, with over 10% already graduating. The $1/day degree program is a unique benefit that sets Walmart apart from other retailers while creating a competitive talent pipeline for the company.
"Walmart‘s education benefit is truly remarkable," says John Smith. "It‘s a powerful recruitment and retention tool that also provides long-term value for the company by upskilling workers for the jobs of the future. I expect to see other large employers follow suit with similar programs in the coming years."
In-House Training and Development
In addition to college degrees, Walmart provides abundant opportunities for on-the-job training and professional development. The company offers a mix of in-person classes, online self-paced courses, and mentorship programs to help associates gain new skills and advance their careers.
Some examples of Walmart‘s training offerings include:
-
Walmart Academy: Dedicated training facilities that provide 2-6 week programs in retail skills, management, and leadership. Over 200 Academy locations have trained more than 800,000 associates.
-
Dollar General Literacy Foundation Partnership: Walmart collaborates with the Dollar General Literacy Foundation to provide online high school diploma and career certificate programs for associates at no cost.
-
Pathways: A training program that teaches entry-level associates skills in three core areas: customer service, merchandising, and teamwork. Pathways is available in 27 languages.
-
Leadership programs: Various development courses designed to prepare high-potential associates for supervisory and management roles within Walmart. Programs are available from the frontline to the executive level.
Investing heavily in employee training is a smart move for Walmart. It allows the company to build skills from within, improve retention, and boost productivity. However, some critics argue that Walmart‘s training primarily serves the company‘s own pipeline rather than employees‘ long-term career prospects.
"The question is whether Walmart‘s training programs provide portable skills that associates can leverage in other companies and industries," notes Sarah Lee. "Offering training is great, but there should be an element of investing in employees‘ overall professional growth, not just preparing them for their next role at Walmart."
The Big Picture: How Walmart‘s Benefits Stack Up
So what‘s the bottom-line assessment of Walmart‘s benefits? Overall, they‘re solid if not spectacular. The company provides the core suite of health, retirement, PTO and discount benefits that you‘d expect from a major retailer, with a few standout perks like the $1/day college program and generous parental leave.
At the same time, there are some areas where Walmart‘s benefits fall short of top competitors. Rival Costco is known for its extremely rich benefits package, with industry-leading health insurance, substantially higher wages, and ample PTO. Amazon and Target also outpace Walmart on metrics like insurance premiums and vesting of retirement contributions.
It‘s also worth noting that Walmart has faced criticism and controversy over its pay and benefits from labor groups over the years. Advocacy groups have accused the company of paying low wages and enrolling employees in public assistance programs like SNAP and Medicaid at disproportionate rates. While Walmart has made progress on raising starting pay, its minimum wage still lags Costco, Amazon, and Target.
Ultimately, the competitiveness of Walmart‘s benefits depends on the specific needs and priorities of each individual associate. For a young, healthy employee with no dependents who takes advantage of the $1/day degree, the Live Better U program alone may be worth choosing Walmart. But for an employee with a family who has major medical needs, the high premiums and deductibles of Walmart‘s health plans will likely be a significant downside.
As a leading voice for retail workers, my take is that Walmart‘s benefits are a mixed bag. They‘re comprehensive in scope and include some innovative perks, but there‘s still room for improvement in areas like cost-sharing, paid time off, and wages. Even small tweaks like covering a higher percentage of health premiums, offering more frequent pay raises, or providing PTO for part-timers could make a big difference in employees‘ lives.
Walmart deserves credit for the enhancements it‘s made to benefits in recent years, particularly in the areas of education and family leave. But with such an outsized workforce and influence, the company has an opportunity – and I would argue an obligation – to set the bar even higher.
As one Walmart employee named Alex told me: "The benefits are fine, but Walmart could do so much more. They make billions in profits and get huge tax breaks. It feels like they‘re always touting how much they ‘care‘ about us, but then they keep our pay just above poverty level. Put your money where your mouth is, you know?"
The silver lining is that Walmart, like many employers, is having to get creative and aggressive to compete for talent in today‘s tighter labor market. And workers are becoming more vocal about demanding better from the world‘s largest company. As long as that pressure continues, I‘m hopeful that we‘ll see Walmart‘s benefits continue to evolve and improve in the years ahead.
In the meantime, I‘ll keep examining the benefits of Walmart and other major retailers – and always pushing them to do better by their workers. Because competitive benefit packages are more than just a "nice to have." They‘re a moral and economic necessity. And companies like Walmart have a unique opportunity and responsibility to lead the way.
