As AIG shells out $165 million in executive bonuses, Walmart takes a different approach. Last week, the retail giant announced its plan to award $2 billion extra compensation to 1 million hourly workers. Yes, Walmart’s hourly workforce will receive a combination of bonuses, profit sharing, discounts and 401k plans. This announcement comes on the heels of several class action lawsuits including thwarting efforts to unionize stores, allowing gender biases, and forcing employees to work through their breaks. It seems the message was loud and clear…Walmart needed to rethink the way it was treating its workforce.

The majority of today’s workforce is comprised of hourly workers. According to the Bureau of Labor Statistics’ Current Population Survey, 75.3 million American workers (58.2% of all workers) age 16 and over were paid at hourly rates. These high-volume industries such as retail are historically unsuccessful at attracting and retaining high-performing workers. Recruiting practices are often immature and turnover runs rampant- up to 90% in some cases. Walmart’s announcement is a welcomed surprise and sets a precedent for the importance of recognizing and rewarding hourly workers.

While the majority of today’s companies do not have the luxury of distributing a 7.2% increase in annual revenue, they can learn a profound lesson from Walmart’s actions. The same drivers behind high turnover can be strengthened and used instead as a powerful recruitment tool including:
• Organizational culture
• Strong employer branding
• Transparency
• Compensation

Although Walmart’s actions are encouraging, where does it go from here? Now that Walmart has demonstrated a serious investment in its workforce, how will it continue to prepare for the future?

• Walmart needs to place emphasis on the quality of hire for its hourly workers. On recent demos with various talent acquisition systems, more and more companies in the retail space seem to be investing in recruitment technology. These companies recognize that they can no longer afford to lose top talent. 

• Bersin & Associates’ TalentWatch report shows that the single most urgent problem organizations face today is rebuilding and maintaining a culture of performance. Walmart needs to continue to respond to this challenge by focusing on the health and wellness of their line workers and line managers.

• Walmart needs to prioritize talent management. Leighanne Levensaler raises this very issue in her February blog post on layoffs at Walmart. Leighanne encourages companies to consider job rotation, part-time work, and transition management.

Best practice companies recognize that recruiting “the best of the best” is not limited to senior positions; attracting top talent should also be a goal when considering hourly and frontline workers. We will be covering high-volume recruiting in an upcoming research bulletin. Let us know what you think…