Wal-Mart Stores Inc. is tweaking its new wage policy, which it announced in 2015 to boost the customer experience in stores, a company spokesperson told Retail Dive.
The retailer raised its hourly minimum to $9, and is shortening the training time it takes for workers to increase their wage to $10 per hour from six months to three. (Workers in areas where the minimum wage is $10 or more do not see an automatic bump after completing their initial training, Wal-Mart spokesperson Blake Jackson told Retail Dive.)
The retailer is also revamping its training process: Content of the Pathways program for entry-level workers, which includes core retail skills as well as “softer skills” like teamwork, customer service and punctuality, remains the same, but feedback from staffers and their managers indicated that the program is more effective without breaks between sessions where workers would go back and practice new skills in stores, Jackson said. Pathways is designed in part to prepare workers for advancement within Wal-Mart or for jobs elsewhere, he added.
Wal-Mart pretty much has to boost its hourly compensation to ensure it can find and keep good workers in an economy with rising employment, compete with rivals that pay better wages and meet new rising minimum wage requirements in several states and cities nationwide. The monthly number of workers that have voluntarily left their jobs has risen since 2010, according to numbers from The Bureau of Labor Statistics cited by The Wall Street Journal, which also noted that the annual percentage retail employees in particular leaving is some 60%. Plus, retail wage growth is outpacing overall U.S. average wage growth.
Moving forward, Wal-Mart will award most store workers a 2% pay raise on a certain day, rather than linking raises to performance reviews conducted on their hiring anniversary. Workers hired on or before Oct. 31 last year will see that raise on Feb. 18, and those who’ve maxed out the pay rate their position allows will get a bonus payment equal to 2% of their annual earnings, Jackson told Retail Dive.
Disconnecting raises from performance is easing workers’ worries about their compensation and helping Wal-Mart shift the emphasis in reviews to improving skills and customer service, Jackson explained.
The policy to give lump-sum bonuses to longer-term employees is an apparent answer to backlash among workers who were aggrieved that newer employees were awarded higher rates upon their arrival. Judith McKenna, chief operating officer of Wal-Mart U.S., told The Wall Street Journal that is “going to be an inevitability of businesses,” adding that the company is giving longtime employees benefits beyond salary, like more paid time off and opportunities for promotions to higher-paying positions.
McKenna held a series of “listening sessions” in 59 stores in all 50 states, which led to the changes in the Pathways program, Jackson said.
Adding up staff in stores and in its corporate offices, Wal-Mart employs some 1.5 million workers in the U.S., a spokesperson told Retail Dive earlier this year. That has made the company’s wage boost a costly proposition: Wal-Mart in November said that improvements to stores and rising wages drove up third-quarter expenses 9%. Still, some economists say that even the higher minimums in many areas remain poverty-level wages.
The wage increases and extensive training programs haven’t spared the retail giant ongoing criticism of its labor practices; some workers have complained that some stores are cutting back hours to avoid overtime pay. Last week, The U.S. Equal Employment Opportunity Commission filed a lawsuit against Wal-Mart, alleging the retail giant violated the Americans with Disabilities Act and the Civil Rights Act when one of its stores fired a longtime employee with Down’s Syndrome.