Why Best Buy CEO Should Be Losing Sleep
I admire Best Buy for many of its innovative practices, its growth and success over its competitors and the general quality of its business.
That's why I was surprised to see the enormous Human Resources risk that they just announced that has the potential to cost them greatly for many years to come.
(See my blog post Top 5 Worst Human Resources Practices for Surviving the Bad Economy.)
Workforce Management is reporting that Best Buy is offering "voluntary buy out" packages to almost all of their corporate employees. According to Workforce, the average corporate employee would receive 7 1/2 month's pay. Best Buy is also sweetening the pot by offering healthcare coverage for a full year for those who accept the offer.
While I appreciate the humaneness of the approach, if I were Brad Anderson, CEO of Best Buy, I would be losing sleep at night right now worrying about who is going to accept the buyout. What happens if the best employees in the most critical positions take the money and run?
Some of the questions that Mr. Anderson is likely (or should be) asking himself and his executive team right now are:
- Will the company be able to successfully redeploy the remaining employees to fill the positions of those who leave?
- What is the projected number of positions that the company will need to re-hire due to lack of internal bench strength and what is the projected cost to do so?
- To what degree will the quality of service, productivity and the corporate culture drop if a large number of key employees leave all at once?
These are not trivial matters.
If all the stars align properly for Mr. Anderson, the employees who keep the company running efficiently (at all levels) will not accept the buyout offer. If he is not so lucky, he might be in for a long and painful recovery period to rebuild his workforce.
That's why I was surprised to see the enormous Human Resources risk that they just announced that has the potential to cost them greatly for many years to come.
(See my blog post Top 5 Worst Human Resources Practices for Surviving the Bad Economy.)
Workforce Management is reporting that Best Buy is offering "voluntary buy out" packages to almost all of their corporate employees. According to Workforce, the average corporate employee would receive 7 1/2 month's pay. Best Buy is also sweetening the pot by offering healthcare coverage for a full year for those who accept the offer.
While I appreciate the humaneness of the approach, if I were Brad Anderson, CEO of Best Buy, I would be losing sleep at night right now worrying about who is going to accept the buyout. What happens if the best employees in the most critical positions take the money and run?
Some of the questions that Mr. Anderson is likely (or should be) asking himself and his executive team right now are:
- Will the company be able to successfully redeploy the remaining employees to fill the positions of those who leave?
- What is the projected number of positions that the company will need to re-hire due to lack of internal bench strength and what is the projected cost to do so?
- To what degree will the quality of service, productivity and the corporate culture drop if a large number of key employees leave all at once?
These are not trivial matters.
If all the stars align properly for Mr. Anderson, the employees who keep the company running efficiently (at all levels) will not accept the buyout offer. If he is not so lucky, he might be in for a long and painful recovery period to rebuild his workforce.
posted by Beth N. Carvin at 2:12 PM
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