Assignment: The Organization
Global Children's Charity (GCC) is a mid-sized charitable organization with 375 staff. Its head office is located in Toronto with a western office in Calgary and an eastern office in Montreal. The organization has recently significantly downsized in employee size by 15% to reduce operational costs so that a greater level of money can be directed to its work for children in developing countries. The senior management team (SMT) has decided it needs to review its total compensation program to identify potential cost savings.
1) Current Situation
a) Given the recent changes, GCC recognizes that it will be important to re-engage its current team of staff to the work at hand-to ensure that every child has every chance to survive. GCC also recognizes that to remain a leading charitable organization in Canada, it needs to attract a high caliber of talent. GCC s workforce of 375 staff cuts across 4 distinct generations:
i) 10% Veterans (age 50 plus)
ii) 40% Boomers (40 to 50 years)
iii) 30% Gen-X (30 to 40 years)
iv) 20% Gen-Y (below 30 years)
b) GCC currently offers a fixed group benefits plan and it is up for renewal April 1st, 2022. The following chart is a breakdown of key benefit plan demographics. Additionally:
i) All premiums are 100% paid by GCC
ii) Medical expenses are reimbursed at 100% through a Pay Direct method
iii) Dental expenses are reimbursed at 100% with no reimbursement limitations
|
|
|
Single Coverage
|
Family Coverage
|
2018 Annual Group Benefit Costs
|
2018 Total Compensation
|
|
Full Time
|
325
|
225
|
100
|
1,690,000
|
16,900,000
|
|
Part Time
|
50
|
0
|
50
|
260,000
|
2,600,000
|
|
Total
|
375
|
225
|
150
|
1,950,000
|
19,500,000
|
1) Given that GCC is a mature organization, recovering from a significant reorganization and in the non-profit sector, GCCs Senior Management Team (SMT) would like to consider a re-designed plan that will:
a) Offer greater flexibility,
b) Offer Accidental Death and Dismemberment (AD&D) coverage, and
c) Introduce cost containment strategies to help reduce costs.
Task
I. What benefit plan approach do you recommend: fixed or flex? If a flexible benefit plan what type do you recommend and why?
II. What five cost containment strategies will you recommend to the SMT and why?
III. What method and key messages will you use to explain each cost containment strategy to staff?