CAN WALMART UPSKILLING CREATE LIFERS…?

When I worked discount retail in high school and college I never had any illusion that I would make a career out of my job. I paid attention, did my best, took care of my departments---hardware, automotive and small appliances---and enjoyed helping customers because that was the work ethic I was raised with, not because I expected to be working for the company any time in the future. The people who did were called, with a certain derision, I confess, lifers. There were two kinds of lifers: men, looking to rise in management and someday have their own store; and mostly married women with teenage or grown children working to bring second incomes into their families. We had no training program as such. People who aspired to more important jobs were simply brought along. Walmart has always had informal and formal training programs for managers, but the workers on the floor were interchangeable widgets who could learn their jobs in a few days and then be expected to exert themselves as good little workers until they left. The Great Recession changed all that. The Republican fostered recession pushed millions of seasoned men and women onto the streets looking for work, any work. Some walked through the doors of Walmarts across the country and Walmart got a taste of what having motivated and conscientious workers was like. Walmart enjoyed the fruits of the recession for more than four years, but finally, when we dug ourselves out of the hole, those people went back to more meaningful jobs with much higher salaries. By then, however, Walmart was hooked on quality workers and the Bentonvile Behemoth began jonesing. Walmart CEO Doug McMillon, whose first Walmart job was on the loading dock while he was in college, inherited his company's addiction and, in part, convinced his board that wages had to come up with the company was to retain at least some of these recession-bred workers walking out the doors. Hourly wages of $9 or $10 weren't enough and now Walmart has turned to a plan to create better workers internally by upskilling. Tamar Jacoby, writing in Wal-Mart Tests ‘Upskilling’ for the Wall Street Journal tells us:
Wal-Mart is famous for keeping costs down, including employee-related costs. In Joplin, the company is testing a new approach: investing in workers through higher wages and training, on the theory that this will pay off all around—for customers, the company and employees. Wal-Mart plans to roll out the new training program to all of its more than 4,500 U.S. stores by early next year, according to Kristin Oliver, executive vice president of people for U.S. operations. And by then, all but the newest Wal-Mart hires will earn at least $10 an hour. Wal-Mart isn’t alone in its new focus on training front-line workers. The trend, known as “upskilling,” is rippling across the retail and service industries. McDonald’s, Starbucks, Gap Inc., CVS Health, Kaiser Permanente and UPS are moving in the same direction. It’s a big change, even for companies with a reputation for taking care of employees. Many firms train college-educated workers; most invest in grooming managers. But until recently, very few bothered to train entry-level service workers. One motive is better public relations at a time when inequality is a hot-button political issue. But bottom-line calculations also play a role. Employee turnover costs money—by industry estimates as much as $5,000 per front-line worker, or 20% to 30% of an entry-level salary. Standard turnover in retail is 50% in the first six months. If Wal-Mart can reduce this churn, persuading people to stay at least 12 to 18 months, it will save “tens of millions of dollars a year,” according to Ms. Oliver. Wal-Mart also hopes that the new training will result in better customer service and happier shoppers. Economists who study retail distinguish between “low-road” and “high-road” employers. One group keeps labor costs down, the other invests more in workers and reaps the benefits in higher productivity. Cost-conscious Wal-Mart is trying to move toward the high road.
What must be keeping McMillon up at night is the question of how long will his board and stockholders tolerate this high-road experiment if stock performance doesn't dramatically improve? Jeff Hess: Have Coffee Will Write.

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