Wal-Mart Stores Inc. will issue pay raises to more U.S. employees in July, part of a workforce investment strategy announced in February.
About 100,000 department managers and specialty workers will see wages increased. Wal-Mart unveiled a $1 billion wage, scheduling and training program earlier this year, and its first wave of raises went into effect in April.
With the latest round of wage increases, pay will range between $13 and $24.70 per hour for department managers and workers in its produce, electronics, lawn and garden and automotive. Apparel and consumer product managers will earn between $10.90 and $20.71 per hour.
Wal-Mart raised its minimum wage to $9 per hour this year and will increase pay to $10 by February. Raises issued in April were primarily for entry-level positions and longtime hourly associates. The 100,000 employees affected by the July wage increase aren't necessarily in addition to the 500,000 announced in February, Wal-Mart said.
"This isn't new or unexpected. We've planned to do this," spokesman Kory Lundberg said. "We had to do certain things with store structure to enable this wage increase. It's really designed to do the same thing everything else is: Make Wal-Mart a better place to work and a better place to shop."
Since announcing the wage increase and store-level restructuring in February, the retailer has been working to reintroduce department managers. It is adding up to 8,000 more of those positions, hires which could likely come from a group of 20,000 zone managers whose jobs were eliminated in April and have yet to be reassigned. Zone managers who had their positions eliminated were reassigned to assistant managers or department managers.
Eliminating zone managers was seen as a way to simplify in-store operations and improve employee involvement within individual departments. Wal-Mart operates about 4,500 stores in the U.S where it employs 1.4 million.
Investors are being told by Wal-Mart that the raises and store restructuring will ultimately help sales that have been largely flat. Wal-Mart is counting on raises to improve morale and increase retention rates.
Patience will be key, industry experts say. Wal-Mart is projecting that the investment in its workforce will reduce its earnings per share by 20 cents this year, but the retailer predicts long-term financial gains from the initiative.
"Look at the investment in employees, the return to department managers. They want to get back to the basics," Stephens Inc. retail analyst John Lawrence said in a recent interview related to Wal-Mart's wage increases. "You hear Doug McMillon talk about the importance of being better merchants and providing better service. It's costly, but the previous strategy cut into their muscle."
Critics of how the retailer pays its workers, including OUR Walmart and Making Change at Walmart, called the announcement a "victory." Pro-labor groups have been pushing for a $15 an hour minimum wage in retail.
Still, the groups questioned whether Wal-Mart is doing enough for its workers. OUR Walmart member Venanzi Luna, a former Wal-Mart deli manager at a recently closed store in Pico Rivera, Calif., said the raises have, in some cases, been accompanied by fewer hours for employees.
"Even by Wal-Mart's own numbers, this announcement impacts less than 8 percent of the company's workforce," Luna said. "During the last announcement, when the company said that 500,000 workers were getting a raise, many workers reported getting a small raise in hourly pay, only to see their shift differential reduced or hours cut, so that they took home the same or less than before."
Business on 06/03/2015