Best Buy is handing out bonuses, paid time off for vaccines and pink slips. Huh?
Best Buy has done a lot right by its associates this year. It raised its minimum hourly wage to $15 and before that offered hazard pay as the novel coronavirus pandemic spread across the U.S. Now, management is thanking workers with a quarterly bonus check and making efforts to keep them safe by giving them paid time off to get vaccinated against COVID-19.
The chain will pay bonuses to full-time workers ($500) and part-timers ($200) employed with the company through Feb. 15. A Best Buy statement said, “Our employees are on the frontlines every day [and] have been essential in ensuring our customers continue to be able to work, learn, connect and cook at home. They have shown resilience, flexibility and a commitment to our purpose of enriching lives through technology.”
The retailer also announced that it would provide full-timers and part-timers with paid time off (eight and four hours respectively) to get vaccinated against COVID-19. It further said it would provide additional paid time off if workers felt unwell after getting the vaccine.
Despite all of the positive news around Best Buy’s treatment of its workers, however, some of the chain’s employees have reached out to RetailWire, claiming the company is being less than transparent with its decision to lay off an unspecified number of workers and cut the hours of others. Employees of the chain have started a coworker.org petition calling on the retailer to properly compensate workers affected by the job cuts.
Best Buy has said that changes it has made have resulted from shifts in consumer shopping behaviors. The result, which CEO Corie Barry referred to back in November on the chain’s third quarter earnings call, is that Best Buy is committed to developing a more flexible workforce and deploying it in ways that can utilize the individual talents of its team depending on the situation and need. An example was moving a computing specialist in one of the chain’s stores to the mobile department or home delivery as the need arises.
The consumer electronics chain posted a 23 percent same-store sales gain during the third quarter, with online sales up 174 percent. It has eschewed future guidance citing uncertainty in the market around the pandemic and projecting comps against a year during which it greatly benefited from consumers working and playing more at home.
Best Buy is scheduled to report its fourth quarter earning tomorrow.
- Best Buy Offers Vaccine Benefit To All, Gives Bonuses To Hourly Employees – Best Buy
- Digital gains are changing how Best Buy puts its associates to work – RetailWire
- Best Buy Reports Third Quarter Results – Best Buy
- Q3 2021 Best Buy Co Inc Earnings Call – Best Buy/Thomson Street Events
- What leadership lessons have retailers learned during the pandemic? – RetailWire
- Best Buy shrinks sales floors for a more fulfilling experience – RetailWire
- Best Buy produces record results doing things differently in the pandemic – RetailWire
- Best Buy connects strong sales to frontline worker performance – RetailWire
DISCUSSION QUESTIONS: What do you think the frontline employee mood is like at Best Buy at a time when it is offering benefits for many workers while simultaneously cutting hours and laying people off? Does worker morale, positive or negative, have an effect on retail performance?
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13 Comments on "Best Buy is handing out bonuses, paid time off for vaccines and pink slips. Huh?"
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They lay off staff, they increase the pay, give bonuses and more time to get vaccinated — what is the end game?
I guess the question to ask is, why even lay off staff if apparently your staff has supported an increase in online sales? You will still need staff, just in different capacities within the store.
Sales Development Manager
And in many markets, picking up extra demand from Fry’s closures!
Fry’s has already been, for the most part, closed for the past year or more … they have not been receiving product for most categories and most major manufacturers quit supplying them. So whatever demand increase Best Buy got from Fry’s has already happened.
Also Fry’s is only about 30 stores.
Retail Industry Strategy, Esri
Sticking strictly to the morale question – of course frontline employee morale has a significant effect on retail performance, especially in businesses that require high-touch interactions with customers. There are strong correlations in our industry between strong store teams and financial performance. It’s not only sales performance, it also impacts operations, turnover, and even shrinkage.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
No company is a charity. They all face changing behaviors by their customers and must react to that. “Best Buy has said that changes it has made have resulted from shifts in consumer shopping behaviors.” Enough said.
Principal, KIZER & BENDER Speaking
I sent this article to a VP of HR for a company with tens of thousands of employees who said what Best Buy is doing is typical.
In my experience, Best Buy has some of the consistently best customer care in retail, its associates are top drawer. The company needs to be completely transparent about what is going on and why, and make sure that message is being clearly transmitted to all employees. Those in charge may have thought this was being done throughout the company but that doesn’t appear to be the case if employees are reaching out for help.
President, b2b Solutions, LLC
My short answer would be that this is not good. They must be confused. Those who were still employed on February 15th got a bonus. Based on the article it does not seem that those individuals knew if they were going to get laid off, have their hours cut or what. The lack of clarity has to impact performance.
Founder, The Adelman Group
Retail Transformation Thought Leader, Advisor, & Strategist
Although this appears to be a mixed message from Best Buy, it’s difficult to determine the real motivations. Best Buy is on one hand rewarding store associates for their performance during the pandemic, which resulted in good sales numbers, but then turning around and laying off employees saying they are no longer needed in those positions due to customer trends. This could be a genuine response or it could be an attempt to lower labor costs because Best Buy feels the risk of adversely affecting sales is minimum. It’s the sort of decision retailers (or any business) make based purely on the financial numbers in front of them. Unfortunately, while we may not like those decisions, in the end retailers are businesses, and they need to be profitable. However one must ask – are they taking advantage of workers while thinly disguising their actions with bonuses and pay raises? It will be interesting to see what Best Buy says, if anything, about this on their quarterly reporting.
Independent Board Member, Investor and Startup Advisor
Store associates are the brand ambassadors in any selling environment. Taking care of frontline employees makes dollars and sense, so keeping them and customers safe adds to the trust equation. As to the concerns raised by reported pink slips, these need to be taken within the big picture. Overall, Best Buy is doing many things right by their employees and customers; reducing hours and layoffs are unpleasant and never easy decisions but are needed at times to position the company for longer-term viability and growth.
Co-Founder & CEO, TakuLabs Ltd.
It’s not an easy line to toe these days. If you don’t quickly adapt to the times you are told that you aren’t moving fast enough. Yet the length of the pandemic has us all fatigued. I don’t judge them for making the necessary changes to their business but with the end of the tunnel in sight, was it not possible to try alternative arrangements in the short-term to avoid another hit to staff morale and this type of publicity?
Influencer, Consultant and Strategic Advisor
It’s just short of a miracle that Best Buy is the lone thriving retailer in its competitive niche when the products it sells are found everywhere. Best Buy deserves credit for making smart decisions to evolve its business model to meet an ongoing series of existential challenges.
Next steps for Best Buy will probably be automated warehouses, dark stores for delivery only, and smaller footprint stores to name a few. Each of these will require changes in its workforce. I think we can agree that no one likes to be laid off, so it is not surprising complaints are being heard and are probably being managed by HR.
It looks to me like they tried to do a major layoff (which is evident if you go look around other sites- sites employees talk on, layoff forums, etc.) of store staff, but they at the same time tried to do this bonus announcement to blur out the message of the layoffs. Hopefully this helps morale of the staff who remains with the stores and is not laid off.
Didn’t Walmart try something like this a few years ago when they did a store closure announcement that hit Sam’s particularly hard, then announced a wage increase or similar?