Walmart isn't worried about losing the people shopping at Walmart. They just need to continue to sell cheap food, clothes, and household things in order to keep them.
Walmart has always promoted from within. I bet very few people have worked part time in Walmart for 1+ year while going to college for a business degree and not been shortlisted for a promotion. The college subsidy will give them more managers with ground floor experience.
Walmart is very concerned about how to grow their customer base. You see this with the 2day online shipping, site to store, and their grocery pickup program. The increase in wage is a direct attempt to increase employee retention and attract better employees. This is about growth, not loss prevention.
This was my immediate first thought, retention and loyalty.
A few months ago my mother retired from Wal-Mart after working as a manager for 30+ years, and I've heard all the "fun" stories. Just about every trope regarding lazy, slack ass workers who routinely no-call-no-show, get fired, then somehow rehired six months later is true. There are good employees, to be sure, but they're greatly outnumbered by the unmotivated, and unwilling.
I see this as a way to pull in and retain driven employees, no different than a software company sponsoring scholarships at a university and simultaneously offering internships / future employment. You'll select for the more driven, hard-charging folks and, hopefully, engender a positive opinion of your company in the eyes of the recipients.
What about the lazy, slack ass management that routinely yank hours, refuse to give full-time hours that offer health insurance?
It's not always everything, but having a manager who was once in the shit usually makes a big difference. Hopefully this program will get more folks who have worked their way up the ranks and know what works so there's better, more informed, and more compassionate management at the store level and higher.
Working for Walmart isn’t a fantastic experience, but promoting from within is a great practice they have.
A close friend of mine from high school started worked at Walmart while attending University. Interestingly enough, she was a business undergrad and, as you suggest, she was shortlisted to management before even finishing her undergraduate degree. She went on to get an MBA and went corporate within Walmart and is still there today, nearly 20 years later.
> The college subsidy will give them more managers with ground floor experience.
Given the above anecdote, I wonder if their decision to subsidize college is just tied to how grossly expensive an undergraduate degree is today vs. yesteryear.
In any event, they will continue to pull managers from the "competent" pool of employees internally and get good PR at the same time.
It's not.
One of the 3 colleges in this new program is Univerity of Florida, which charges $6,381/yr, before substantial financial aid offering. https://www.collegedata.com/cs/data/college/college_pg03_tmp...
They were for a long time, especially when they didn't collect sales tax. Many people just stopped comparison shopping and haven't realized the situation's changed.
> but they’re just the most convenient.
Not necessarily. Oddly enough, Best Buy is the most convenient for me (for electronics), and it's usually not any more expensive than Amazon, at least for the stuff I buy. Amazon less convenient due to the hassle with their delivery delays and packing materials.
They will also price match Amazon in most cases. I hear a lot of people complain about Best Buy but I’ve made a few big purchases at my local Best Buy store and their employees were super helpful and friendly. I’d much rather shop there and get the item immediately rather than wait two days, personally.
Almost everything else, I tend to favor Amazon though. But I find myself looking locally more and more.
Made no sense for me to pay more ($20 across 4 bulbs) to get them that day in person.
http://www.businessinsider.com/best-buy-punishes-customers-f...
I half-jokingly asked the gentleman helping me if we could price match, and how long that would take. He said that if their automated system "accepted it" then it'd be instant.
Their system did accept it pretty much immediately, and so I saved $2 for about 90 seconds 'delay' (half of which was borderline laughter/seeing if I was serious; I was only half-serious).
Made for a positive experience for me and my wife, and I now won't hesitate to consider Best Buy, via price match, in the future if I'm ordering something that they stock locally. It was also the first time I'd ever asked for a price match in the last 10+ years, if ever. :)
Buying anything that you expect to keep more than a year is a waste at Walmart, even if its cheaper.
Full Disclosure: I'm a WM Associate, but am speaking on my own. This type of behavior is against our Code of Ethics, and would be sent to investigation.
You'll find the following:
LG TV Serial:ABC123WM at walmart
LG TV Serial:ABC123BB at best buy
It's called managerial plausible deniablity. And this tactic is very much welcomed across all stores, as it prevents comparison shopping.
I THINK this is along the lines of your request. I read this when it was published (2006) and didn’t reread it when I searched for it now. Describes a culture of lowering quality to achieve sales at prices dictated by WM, as I recall. Sorry, want to be more complete but unable at this moment.
many electronics manufacturers, however, do create "black friday" versions of their products. this is well-documented. i think this practice is the origin on the claim made by the GP.
BestBuy: "Sorry, but that Walmart price is actually a different TV model."
Caveat: only if you need a car anyways. If you only need a car to run errands, Amazon is pretty competitive for pretty much anything except fresh groceries.
What is true is that there are people who live in cities and use Zipcar, Uber, regular rentals, etc. instead of owning. If that's the case, the cost calculus changes if you need to pay in order to run errands.
I'm not sure which "couple of cities" you're thinking of, but I'm pretty sure I haven't lived in either of them. And even when I've owned a car, I've never used a car day-to-day.
I live (barely) inside the city limits of a town of 13,000 people, in a county of 37,000. My wife and I both have vehicles and we use both of them probably 80% of days - and I work remotely to boot.
http://www.governing.com/gov-data/car-ownership-numbers-of-v...
https://lendedu.com/blog/walmart-vs-amazon/
http://www.businessinsider.com/walmart-vs-amazon-which-is-ch...
What Wal-mart currently has that Amazon doesn't is a brick-and-mortar network that works. If it can make that experience much better, it can beat Amazon in the physical space for ten years while Amazon fights the learning curve.
I suppose they hope such a gesture will woo people away from Amazon and back to Walmart who cares about people, unlike Amazon.
I think that the likely culprit is a more competitive labor market in general, but there's no reason to outright reject the idea that the demand for labor could in part be driven by said tax cuts to a non-trivial extent.
Because they're historically linked to stock buybacks and M&A activity. The ROI is usually much more clear-cut.
Does anyone have evidence that a retailer of Walmart's size investing in customer service and employees nets a positive ROI?
Idk if you'd consider the two the same scale (the market cap for Wal-Mart is probably 3x that of Starbucks if I recall) so maybe that's _some_ evidence?
Though I agree evaluating/comparing the ROI on the two is probably not the cleanest analysis in the world.
The news has been full of dozens (maybe hundreds by now) of large and small companies using the tax change to increase employee wages and benefits.
While there's currently no specific press release linking Wal-mart's actions with the tax change, it certainly isn't beyond the realm of possibility (and HN-class conclusion jumping).
No, there have been dozens or hundreds of companies claiming that tax cuts were responsible for employee compensation increases. Many of those were one-time bonuses, but the tax cuts are ongoing. In some cases where the benefits were ongoing (like Walmart's hourly pay increase), you'll find that they tend to coincide with the overall trend of state minimum wage increases. This is just PR: they're getting ahead of the trend and trying to attribute it to tax cuts rather than other forces.
Also, since employee compensation was tax-deductible even before the tax cut, taxes certainly weren't stopping companies from raising wages before the tax cut.
The tax cuts are causing increased employee benefits is a red herring.
Suppose the company is targeting $100 net profit, and has $200 income available, before taxes and "bonus wages".
At 20% tax rate, the company can pay $75 in deductible wages, plus ($(200-75)0.2) $25 in tax
At 10% tax rate, the company can pay $89 in deductible wages, plus ($(200-89)0.1) = $11 in tax.
Lower taxes enables higher wages.
Stock repurchases are filed on the balance sheet, post taxes, which is why companies take the increase in net income but then use the extra cash to buy back stock. The former keeps the company competitive and the latter increases the stock price.
https://www.marketwatch.com/story/now-we-know-where-the-tax-...
http://money.cnn.com/2018/02/09/news/companies/tax-cut-bonus...
First, of the companies that are doing stock buybacks, not all are doing only stock buybacks. Many are doing other things as well.
Second, there's a whole great big world out there called "local news" where you'll see these stories that aren't covered by CNN, Marketwatch, CNBC, etc...
Yes, some big companies are doing stock buybacks, but there's a lot more going on in the business world than the Fortune 500.
This follows a report by benefits consulting firm Aon Hewitt finding that 83% of large companies don’t expect the tax cut to boost salaries at all — just help pay for small bonuses companies like WalMart WMT, +1.98% and AT&T T, +0.70% gave workers, which reporters soon discovered were, themselves, skewed toward higher-paid, longer-tenured employees in many cases.
However one feels about the issue my point still stands. Th comment that started this thread gave no supporting evidence for the claim and thus deserved to be downvoted.
Also the article we are all nominally commenting on is about Walmart which is a Fortune 500 company. Is its tuition plan because of the Trump tax cuts?
Not really. There have been a lot of stories of companies offering one time bonuses to employees, despite the tax cuts being ongoing. And historically, windfalls like that have been used mainly to benefit the higher ups in the company, instead of the workers.
And it's not like Wal-Mart was hurting for money before. They could have raised pay before. Or they could have kept the tax cut money and paid it out to owners. So I'm not convinced. The tighter labor market makes a lot more sense.
A simple exercise: say you have a small business. Your tax rate is 35%, gross revenue is 200k, tax-deductible expenses are 100k (1 or _maybe_ two employees). We'll assume a C corporation, just for illustration purposes and that you care about the after-tax profit it generates. In practice for something this small you would probably just pay yourself a salary and be done with it...
Anyway, you have 100k taxable income, and 65k after-tax profit. If you paid your employees more, you would have less after-tax profit, because your tax rate is not 100%.
Now say the tax rate drops to 21% (this is the cut that happened) and you give your employees a 10% raise. Now you have 110k expenses, 90k taxable income, 71.1k after-tax profit.
So a tax cut in this situation does in fact allow an employer to both have more after-tax profit _and_ give raises to employees at the same time.
Now we can have a discussion about what government services the employees and the employer won't get as a result of the tax cut, of course. That needs to be accounted for too, in the grand scheme of things.
I'm not sure what you're asking.
The 35 -> 21 change is the actual corporate tax rate change that happened end of last year in the US.
You don't _have_ to pay your employees more to be taxed at the 21% rate. But at the new tax rate you _can_ pay your employees more and till make more of a profit.
So in the end the whole question is where the money that would have been paid in taxes goes instead. It could be going to stock buybacks, dividends, investment in the company, raises for employees, or just sitting in the company bank account. In real life the answer is probably "all of the above" and the proportions vary.
Again, I'm not sure whether I answered your question, because I'm not sure what you're asking.
You would think it a silly idea: educating people into certifications that overqualify them and likely lead to their exit to greener pastures. There is the other end of the pipe to consider: students leaving high school would see Walmart employment as a way to afford their education - providing an everlasting stream of new employees. In addition, Walmart relies on successful innovators to stock their shelves with compelling products. This is selfish positive sum reasoning[1], where doing good ironically results in more for you.
That's my best guess, at least.
So, if 10% of employees start, less than 1% will finish. I think there's probably more than enough room for 1% of their employees to move up. Also, great PR form.
I don't think it has anything to do with image. Just basic market dynamics. They need more, better, and more reliable employees. So they're offering a better value. That, or one of the Waltons has decided to get in on this sweet presidenting business and they're tossing a few bones out for 2020.
Worth noting the Fred Meyer nearby is also going the same direction. They just installed a ton of self checkout lanes and it seriously works well too. The store was absolutely packed this last weekend but there was hardly a wait to checkout.
IMHO it's a step in the right direction. Corpos are soulless and people vote with money. Take your $ somewhere else and they'll try to meet the bar.
Amazon's tough love is also well-known at least from what I've read so having an upper hand over them may sway the lazy but compassionate crowd to take a ride to Walmart, not amazon.com.
> Nearly 46% of Walmart’s 1.5 million US workers are African American.
Walmart's stock is up 2% so far. I think that's what they always have cared about the most.
Wow, raising the wage combined with this tuition assistance makes it seem like Walmart is actually trying not be known as the worst employer out there anymore - these benefits are better than some of the retail jobs I used to work a few years ago. I wonder why they suddenly care? Walmart gets its customers because they have low prices (or at least successfully trick people into thinking they have low prices), the kind of people who value that are unlikely to stop shopping at Walmart because of the negative PR around how they (used to) treat their workers.