Spring Wellness Products Case Study

Spring Wellness Products (SWP) started as a small family business selling
100% natural products in one retail outlet in Ontario. As a result of the increasing
interest in wellness and the excellent reputation of its products, SWP has
experienced rapid growth, with 25 stores at present and expects to open 15 more
next year. This has expanded its retail operations from three provinces to seven,
as well as one location in the United States.
The full-time employees include those at head office and retail employees; the
part-time employees work in the retail stores and there are a number of seasonal
workers who are brought in during the holiday season to work in the stores, the
online order office and the warehouse.
The company has made two acquisitions in the past five years. After outsourcing
their online ordering to Global Services for several years, SWP acquired the
company so it could handle that line of business internally. The online business
currently contributes 30% to the company’s revenue. Similarly, SWP’s product
warehousing and distribution was previously outsourced to Reliance Logistics,
until the company acquired that firm last year.
The company’s head office is located in Ontario with the majority of operation
and administrative functions managed there, while the US operations are
managed from the California location. The online order office is located in New
Brunswick and the warehouse and distribution centre is located in Québec.
SWP has decided to centralize support services rather than having overhead
costs in each operational centre. The current business plan calls for all support
operations to be centralized at the Head Office over the next year.

© The Canadian Payroll Association – Introduction to Payroll Management – 2019 – Vs. 13.0 2
There are four payroll systems currently being used because of different
locations and the acquisitions. The Head Office processes the payroll for the
Head Office and all Canadian retail employees. The following chart outlines the
characteristics of the various sites:
Office
Location
Number of
Employees
Number and type
of Payroll Staff
System
Used
Payroll reports to
Head Office
(Ontario)
200 FT
100 PT
100 seasonal
Payroll
Compliance
Practitioner (you)
ADP Human Resources
Manager at Head
Office
Online
ordering
(New
Brunswick)
40 FT
20 seasonal
Office Manager Ceridian General Manager
on site
Warehouse
(Québec)
40 FT
20 seasonal
Office Manager OuiPay General Manager
on site
US
(California)
20 FT
6 seasonal
Store Manager Intuit Finance Manager at
Head Office
The new centre will provide support services to the company’s current 400 fulltime and part-time employees who are at 28 sites located in seven Canadian
provinces and one state in the USA. The centre will also support approximately
150 seasonal workers who are typically only hired for a six week period. With the
planned addition of 15 more stores next year, there will be an increase in the
employee base, both full and part-time.
SWP has both hourly and salaried employees with weekly, biweekly and semimonthly pay period frequencies. In addition to the details in the chart above, the
monthly executive payroll for the management team is done manually by the
President’s Executive Assistant.
As it can be difficult to retain employees in a retail environment, the company offers a competitive benefits package. There is a collective agreement in place at
the warehouse site that provides better benefits for the unionized employees.
One of the first projects for Human Resources, once the services have been
centralized is to determine what the increased expense would be if the company
offered the same benefits to all its employees.
Another project in the business plan is to standardize the various human resource policies that currently exist with respect to employment standards requirements in each jurisdiction. Again, this is to ensure employees are treated consistently with the best benefits required by legislation. The Human Resource
Manager has tasked you with this project.

1. What are five (5) of the major issues to be addressed with this centralization project? Discuss why you have chosen each as a major
   issue.
2. Chose two (2) of the five (5) major issues you identified in Question 1 and
   provide an analysis of the situation for each issue.
3. For the two (2) major issues you chose in Question 2, what are the alternatives available for each issue? Provide an evaluation of each
   alternative.
4. For each of the two (2) major issues, state your recommendation for an
   action plan.

Sample Solution

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