Wal-Mart (NYSE:WMT) completed a two-year plan to invest $2.7 billion in its employees in the United States in February. That investment included raising its minimum wage to $10 an hour, while its average full-time hourly wage climbed to $13.38 an hour for full-time workers and $10.58 an hour for part-time employees.
The wage increases were only part of the company's efforts to both improve its workforce and make employees' lives better. Wal-Mart also greatly stepped up its training and has even recently begun offering workers tools to help them manage their finances.
It's a big commitment by the company at a time when the labor market has contracted due to unemployment rates hovering around historic lows. Wal-Mart has done some nice things, but it isn't doing them just to be nice. The chain needs a well-trained, stable workforce, and these investments, at least in theory, should make that happen.
What did Wal-Mart do?
In addition to paying more, the retailer also launched WalMart Academy, a series of schools "where our front-line hourly supervisors, department managers, and assistant managers receive two to six weeks of training," according to a press release. The chain had opened 100 Academies as of April (with each serving about 26 stores) and plans to open 100 more by the end of 2017.
This training not only helps Wal-Mart employees do their current jobs it helps prepare them for advancement within the company. In 2017 more than 225,000 workers will graduate from the program.
Wal-Mart has also offered some employees extra earning opportunities through a pilot program that has store associates making home deliveries. And, during the 2017 holiday shopping season, the company chose not to hire and instead gave existing employees extra hours.
Has it worked?
Wal-Mart did not respond to a request through its public relations web page to provide data on employee retention rates or to comment on worker satisfaction. Ratings from company employees on Glassdoor do show that employee satisfaction has increased since Doug McMillion took over as CEO in Q1 2014.
When McMillon assumed the job the retailer had a 2.9 rating. That rose to a 3.0 in Q3 2015 before settling in at a 3.2 in Q4 2016, according to Glassdoor data provided at the request of The Motley Fool. In addition, the same report shows the CEO's approval rating began at 56% when he took over and currently stands at 69%.
The company has also generally raised its scores across all of Glassdoor's metrics, although it's 3.2 total remains below the 3.3 company rating across all 700,000 companies on Glassdoor. The data is based on at least 130 reviews shared on Glassdoor by Wal-Mart employees, per quarter, per workplace factor rating, respectively. The Q4 2017 data is as of Dec. 14, 2017.
It's a big ship to turn
Wal-Mart isn't all the way there yet, but it has made notable progress. Making changes at a company this big isn't easy and their impact will take time. When it comes to treating its employees better the retailer clearly has made some moves designed to create a better working environment in a way that will also benefit customers.
These moves aren't enough and the company has acknowledged that with a recent effort to put financial planning tools in the hands of its workers. The company has also added immediate payday options, and there are almost certainly more moves to come.
What's happened so far, however, has helped. Paying workers more and training them better serves employees, customers, and shareholders. More work remains, but progress has been made.