Around 340,000 employees who work for the company will receive a raise
Good news for employees of retail corporation Walmart: in March, the employees working in the stores will make between $14 and $19 an hour instead of the $12 to $18 an hour they used to make. The raise comes as a surprise since several retail companies have been struggling with a decline in sales.
Walmart announced in a memo send out to employees that they will raise the average hourly wage for employees from $17 to over $17,50. For the workers who directly work with customers in the stores, which is around 340,000 employees, the hourly wage will increase with 17%. That means that 21% of the companies workers will see an increase in their salary. According to CEO John Furner, the raise is one of many to come. Store employees who work in parts of the country that have a competitive labor market might see their pay increase more. All of this might be an attempt to retain employees at Walmart, to prevent them from looking for a different, better paid job.
Retail is currently dealing with a decline in sales and a tight labor market. The industry usually has a higher turnover rate and when the job market is competitive, retailers have to work harder to keep their employees. And rehiring and training new workers is expensive. Gregory Daco, chief economist at EY Parthenon, the global strategy consulting arm of Ernst & Young, told CNBC: “Any retailer is going to have to think carefully and think twice about laying off a good share of their workforce.” And so, retailers have to invest in ways to retain their workers.
But Walmart isn’t just trying to keep their employees by raising their wages. Furner announced that Walmart will also cover more college tuitions and fees for employees by expanding their current ‘Live Better U’ program. The company is also working to create more high-paid jobs and will help more employees to get a better paying position, like truck driver.
The wages for Walmart employees are still below other retail companies but this might help several people struggling to make ends meet this year.
Source: CNBC | Image: Unsplash, Marques Thomas