Walmart U.S. CEO: Good retail jobs are much more than good pay

Discussion
Photo: Sam's Club
Jan 13, 2020
Tom Ryan

At a keynote session Sunday at the NRF Big Show, John Furner, Walmart U.S.’s new CEO, said the first step he took to drive employee satisfaction when leading Sam’s Club was to invest significantly in retention, particularly team leaders that guide departments.

Mr. Furner, who led Sam’s from 2017 to late 2019, said, “The team leader lives in the community, probably went to school in the city and he wants to be there. So, retaining that team leader is just great business for us.”

Retention was made a higher priority after surveys continually showed members asking for “friendly” associates.

Sam’s hiked hourly pay for team leaders to between $18 and $20 from the low teens, he said. Turnover in some of the targeted positions saw decreases of as much as 50 percent.

Mr. Furner’s comments came after Taco Bell announced last week it was testing paying managers $100,000 a year at some company-owned locations to support employee satisfaction, recruitment and retention.

But Mr. Furner stressed at the session entitled, “Why Retail Jobs Can Be Good Jobs,” that it’s not “all about pay,” but also “removing friction.” Sam’s in recent years has rolled out programs to make it easy to change schedules to accommodate work-life balance as well as initiatives to enhance in-store productivity.

A breakthrough was the launch last year of “Ask Sam,” an app that allows associates to access information via their mobile phones about work schedules, locations and inventory availability. The retailer has also simplified tasks and has moved to reduce SKUs to alleviate bottlenecks due to inbound shipments.

Sam’s has also used technology to bring more employees to the selling floor. Previously, the highest-paid, longest-tenured employee at Sam’s would be someone handling invoices in the back office; now it’s the head of the meat department. 

Finally, training and development remain critical, particularly as new jobs, such as those supporting home delivery, are created. “It’s just a matter of giving the people the path and the ability to learn, train and develop,” said Mr. Furner.

DISCUSSION QUESTIONS: Has it become significantly more important for retailers to retain their senior staff? What job aspects that don’t involve a paycheck are particularly beneficial in improving retention?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Recruitment and on-boarding take time and resources; conversely, the flat learning curve of experienced staff helps retailers stay agile and competitive."
"It’s so important that employees feel like they’re upwardly mobile within their company to remain motivated."
"One hint for Mr. Furner before I comment. Interesting that he used the pronoun “he” to describe team leaders. “He” might want to rethink that next time."

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22 Comments on "Walmart U.S. CEO: Good retail jobs are much more than good pay"


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Mark Ryski
BrainTrust

Like any business, attracting and retaining experienced, top performers is key. As noted in the article, pay is just the starting point. Training, work-life balance, and recognition are all important elements for retention. And while it’s hard to say exactly which aspects will have the most impact on retention, the trend is clear: thoughtful retailers are re-investing in their people and they are delivering better business results. I don’t think this is a coincidence.

Richard Hernandez
BrainTrust

Mr. Furner is saying out loud what all of us have known for years – pay your employees, invest in their future and you will have happier employees. I remember my father being very disappointed in me that I chose retail as a career instead of becoming a doctor. For the record, my dad forgave me eventually and I have never looked back…

Neil Saunders
BrainTrust

Pay is a big issue for a lot of employees, but it’s not the only factor. Working conditions, satisfaction from the job, enjoyment of tasks, feeling a sense of purpose, and connections with the team you work with are also vital. Because of this, retailers need to look at the wider working environment to secure and retain talent at all levels.

Bob Amster
BrainTrust

Retention has always been an imperative in retail, albeit often times overlooked or ignored outright. In today’s customer centric environment, in which we wish to entrust more of the store’s interaction with the customer to the front line associate, which is more costly, to train and retrain or to reward?

Art Suriano
Guest
There are many good points in the article. Pay is significant; being able to have a say in your schedule is equally important, but the one key element missing from the article that matters most to store-level employees is appreciation. Too often, the associates at the store level do not receive the “thanks” they deserve from upper management. Freeing them of tasks is excellent, and allowing them to spend more time on the floor with customers is beneficial to both the retail chain and the associate. However, customers can be demanding at times, and the hours with one standing on their feet a long time can be tedious. So making sure we let the associate know that we appreciate their service to the company and thanking them for their contribution will often go as far as higher pay. Lastly, when training store level people, we typically tell the employee everything we want them to do and not do but, most importantly, tell them “why.” Make them feel part of the team by sharing with them… Read more »
Jeff Sward
BrainTrust

Not to split hairs, but I would have said — FIRSTLY, training and development is critical. It’s not retention for retention’s sake, it’s retention for ROI … everybody’s ROI. I’ve always liked the query/response of “What happens if we spend all this money to train people and they leave? What happens if we DON’T spend the money and they stay?” It’s not a platitude to say people are the biggest asset. Manage accordingly.

Paula Rosenblum
BrainTrust

Building a “bench” in the store of people who are candidates for managerial jobs has been around for years. But it’s more important now than ever. The customer has tons of choices and no need to be loyal, and we are not the only research company to discover that empowered employees are a key part of retailing success today.

Let’s say that is STARTS with a good paycheck (sorry guys, no way around this) and moves on to training, career-pathing and retention activities.

We can make fun of today’s “Whole Paycheck” but its employee stock program helped a dear friend of mine put his daughters through college quite some time ago. That’s no small thing. And he was a produce manager in a local Whole Foods. That’s pretty good for a department manager.

It’s a big ask, because it’s so disruptive to a 100 year old model, but a less transient workforce is now a retail imperative.

Zel Bianco
BrainTrust

That is why huge layoffs or re-orgs such as the one at Walgreens makes it very difficult to have things run smoothly. Whether it be team leaders or those managers who run departments from headquarters, short term steps to please investors do not always translate into a sustainable plan, especially among those employees who remain. Pay is important but a sense of belonging and knowing your employer cares is a very important part of retaining good people and morale among the worker bees.

Doug Garnett
BrainTrust

This is a great discussion. It IS critical to retain staff in all positions and especially these managerial roles.

From watching my son at retail, I’d add to this list of issues to be concerned about. Even the lowest level retail employees are more in touch with customers and key to ensuring customer satisfaction. But companies use flawed ideas from ISO9000 to impose penalty programs when customer surveys show even minor issues. Every front line employee will have at least some customer complaints — or they are being far to compliant with customer beefs.

Give front line employees the backup of management in dealing with customers and making smart choices. That will also increase retention.

Respect is a tremendous advantage in retaining employees.

Andrew Blatherwick
BrainTrust

It is amazing that in Italy and the U.S. senior colleagues in restaurants, Maitre d’s, are revered and very well respected in their community yet senior team leads in retail outlets are seen as dispensable and of low value. It is not surprising that they move on often and do not treat their positions as long term career roles. I congratulate Mr. Furner on identifying these people as being critical to a good retail operation, delivering higher customer satisfaction and therefore greater customer loyalty. A good Maitre d’ is king on the floor watching, directing and ensuring that all customers at the restaurant are happy and enjoying their meal and experience. Retail has to learn from this and replicate the experience consumers receive if they are to survive in today’s multi-channel world.

Lisa Goller
BrainTrust

Yes, a tight labor market and intense retail rivalry make senior staff retention even more essential. To keep up with heightened consumer expectations and technology upheaval, retailers need to keep their senior staff happy and loyal. Recruitment and on-boarding take time and resources; conversely, the flat learning curve of experienced staff helps retailers stay agile and competitive.

Harley Feldman
BrainTrust

Training for employees is important in every business. In retail, it is becoming more important as shoppers now have many omnichannel options like buying online and going to the store. Also, more technology is being used by retailers to increase productivity and customer services. Smart retailers will focus on training to keep employees up to speed with shoppers and technology. The training will give the employees more job satisfaction which will improve retention.

Ryan Mathews
BrainTrust

One hint for Mr. Furner before I comment. Interesting that he used the pronoun “he” to describe team leaders. “He” might want to rethink that next time. Now, on to the questions. Of course it is critical to retain talented and productive senior staff. But the assumption that money isn’t the most critical element of work is both optimistic and misguided in most cases. We are talking retail workers here, not artists, or researchers, or nuns. So getting the money right makes it hard for them to walk away. Now, money being relatively equal, it seems to me that managers want to be recognized as individuals who ought to have a voice in how things run rather than efficient soldiers robotically carrying out orders they have been given from on high. So pay, recognition, and respect would top my list, followed by upward mobility, the ability to shape teams, and incentivizing top performers.

Ralph Jacobson
BrainTrust

Today’s retail leadership landscape is such that it is becoming increasingly rare to see leaders stay at the same company for more than 15 years. That’s just a fact of life today. However, that is NOT necessarily a bad thing. I can tell you that whenever I met senior leaders who had worked for the same company for decades, they quite often fail to experience the internal good, bad and ugly mechanisms in competitive businesses from which they could have learned, and which they could have leveraged when leading other companies. In other words, leading the same company for 30 years doesn’t provide the exposure to industry best practices found elsewhere.

On the other hand, retention at lower levels has always been a challenge and the soft benefits need to continue to become increasingly competitive to lure staff away from more popular industries.

Jasmine Glasheen
BrainTrust

Today’s retail employees have to fire on multiple cylinders. They need to fill the roles of brand advocate, customer service specialist, salesperson, and BOPIS coordinator, among others. Because of this, along with the labor shortage that the U.S. is currently experiencing, retailers need to focus on retaining their best associates.

In addition to increasing hourly pay, retailers can offer long-term employees positions such as floor manager, senior associate, etc. It’s so important that employees feel like they’re upwardly mobile within their company to remain motivated.

Mark Price
BrainTrust

Store associate retention has always been critical. Now, in the age of extensive e-commerce competition, the single biggest differentiator that a retail store has is the quality of the customer experience.

All the research has shown that store and department managers are some of the greatest factors impacting customer retention and store profitability. By prioritizing store and department managers with salary and training and support and technology, Walmart has placed them selves in a great position to continue to drive growth in revenue and profit ability at retail locations.

Shep Hyken
BrainTrust

Very few stores can be successful long term without a good manager. Consider the low performers that replace a questionable manager with a good manager and you’ll typically find an improvement. And, these managers have both operational and people skills. They have to know how to run the store and, at the same time, connect with their people. That’s why it’s crucial to retain your best managers and employees. Study after study shows there’s more to the job than just a paycheck. Personal fulfillment, appreciation and wanting to be a part of something are some of the other motivators that keep good people.

Oliver Guy
BrainTrust

This is a fascinating discussion area given the great deal of talk in the media about low paid roles and also the lay-offs we are seeing in retail. In my experience, a fun, family orientated and stable environment are some of the best ways non compensation-based approaches to retain staff. By family orientated, I mean not only giving the staff member a degree of trust to allow them to deal with family issues as they occur, but also making the working environment feel like a family.

Ed Rosenbaum
BrainTrust

The answer to the main question is yes. It has become more important to retain senior staff. There are many reasons why. The key reasons for me would be the ability to live without worrying about being able to pay the bills and not need a second job. The other reason is the cost of hiring and retaining key people. If you are fortunate to get the right person, you do not want to lose them. In many cases, others leave when their manager leaves. People like to work with good people who show they are focused on them and the company they are working for.

Craig Sundstrom
Guest

While I don’t disagree with Mr. Furner comment — who would ?– hopefully it won’t be taken out of context to mean good pay isn’t necessary, rather than the intended message that it (alone) isn’t enough.

Jeffrey McNulty
Guest

Outstanding job by Walmart of understanding this massively critical component to any successful company. Talent acquisition and talent retention are symbiotic companions that create an atmosphere for thriving success.

I am happy to see that Mr. Furner truly understands this strategy. I am looking forward to witnessing the results of this methodology.

True Servant Leaders create an environment where employees/leaders become “raving fans” that become brand ambassadors and staunch advocates for their organization.

Mel Kleiman
BrainTrust

Fortune Magazine reported that the average retailer makes less then $7,000.pp net profit per employee. With turnover estimated to cost over $3,500.00 per employee the best way to increase profits is to reduce turnover. That puts dollars saved directly to the bottom line.

wpDiscuz
Braintrust
"Recruitment and on-boarding take time and resources; conversely, the flat learning curve of experienced staff helps retailers stay agile and competitive."
"It’s so important that employees feel like they’re upwardly mobile within their company to remain motivated."
"One hint for Mr. Furner before I comment. Interesting that he used the pronoun “he” to describe team leaders. “He” might want to rethink that next time."

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