How to reduce turnover and retain qualified associates at walmart (specifically management, in rural stores) - Research Paper Example

?Deconstruction of Literature Wal-Mart is currently the world’s largest corporate employer with 8 million employees (Reliable Plant Magazine and Lean Manufacturing Journal). In 2009, Wal-Mart created 33,000 new jobs and operated 4562 stores in the United States (Wal-Mart 2009 Annual Report). However, Wal-Mart has a problem retaining qualified managers and associates and reportedly has a turnover rate of 40-70% (Coleman Peterson, 2005; Store Wars: When Wal-Mart Comes to Town, 2005). Contributing to Wal-Mart’s high employee turnover rate are the characteristics of the jobs they offer, such as low hourly wages, inadequate benefits, constantly changing schedules, and little possibility of advancement. (Lichtenstein and Johansson, 2011) Obviously, these characteristics will not attract the most qualified or career oriented applicants (i.e. recent college graduates). According to Danny Baisden, Co-Manager of the MacArthur, West Virginia, Wal-Mart, “we will need to replace 30% of our work force in the next year, management and hourly associates. We also have a current shortage of associates. The stores hands are tied and are not able to negotiate with current applicants on salary and benefits. This makes the stores less competitive”. (Baisden, 2010) In West Virginia, more than 25 percent of the state’s 980,000 working-age adults (25-64 years old) hold at least a two-year degree, according to 2008 Census data. This compares to a national average of around 38 percent. Attainment rates in West Virginia are increasing modestly, even though the proportion of degree-holding young adults — those 25-34 years old — mirrors that of the overall adult population. (Lumina Foundation for Education, 2010) Many recent graduates are turning down good job offers, holding out for better jobs and salaries in the belief that a college degree entitles them to more than entry level," says Ogunwole. "In today's job market, that's just not realistic." (2009 College Grads Moving Home in Large Numbers, 2009) However, an entry level position with very good probability for advancement may be much more attractive to these recent graduates and other well qualified individuals. In order for Wal-Mart to attract better qualified applicants, some policy changes must be made. For example, Wal-Mart could create a system where employee wages increase with the amount of time associates are employed with the company and with an employee’s skills and experience. (Lichtenstein and Johansson, 2011) Wal-Mart could also offer their employees better benefits, such as less expensive health insurance. Another suggestion would be to provide employees with more stable schedules so that they are not constantly changing. Wal-Mart could also create more hourly positions which include greater responsibilities, training and higher wages for those positions. Finally, Wal-Mart can provide their employees with better opportunities for advancement within the company. (Lichtenstein and Johansson, 2011) Methodology In order to determine whether the suggested changes will reduce employee turnover rates, perhaps they can be implemented in one store or one geographical area such as the store in MacArthur, West Virginia. Once changes are in place for some time (i.e. one year), Wal-Mart will be able to see whether or not they have an effect on employee turnover rates. Study Subjects Subjects for the study may include associates currently employed at the store. College students in the area may also be subjects for the study. Data Collection Before making changes, current Wal-Mart associates could complete questionnaires regarding what they believe is important, would be most beneficial to them, and increase the likelihood of them remaining with the company. Wal-Mart may also want to survey college students in the area in order to determine what would make employment at Wal-Mart more attractive to them. Once this data is collected and analyzed, these questionnaires can provide the company with a better of understanding of their current employees’ priorities and concerns, as well as the priorities and concerns of potential applicants in the area. The data may also reveal issues, other than those discussed above, which may be important to both current employees and potential applicants. The store can then begin implementing the changes in order to see how they affect turnover rates. Method Providing current employees with more stable schedules is a change that can be implemented in the store at little or no cost to the company. Instead of employees having constantly changing schedules, a system can be implemented that creates employee schedules which are more stable. This can be done by store managers that are familiar with the employees, making schedules more personalized to employee needs. Store managers can also identify employees in supervisory positions, such as department heads, which include additional responsibilities. These individuals can then receive any necessary training for these positions and a wage increase based on the responsibilities of the position. The company can also provide advancement opportunities for current employees. Employees that have been with the company for the most time can be identified by store managers. These employees may then be offered available supervisory and/or managerial positions based on their experience and desire. The company must then provide these employees with necessary training and wage increases based on their new positions. The most difficult and expensive change to implement is increasing employee benefits. In order for this policy to be implemented, changes may need to be made for the entire corporation rather than an individual store. However, perhaps a health insurance package could be offered in the store which is less expensive for employees. Wal-Mart can also inform college students in the area of the policy changes, perhaps making employment at the store more attractive to them upon graduation. Once these changes have been in place for approximately one year, the store’s employee turnover rate can then be examined. A lower turnover rate in the store would be evidence that employees are more satisfied with their employment and the changes made in the store were effective. Works Cited Coleman Peterson, “Employee Retention: The Secrets behind Walmart’s Successful Hiring Policies,” in Human Resource Management, Spring 2005, 85, 87-88. The turnover rate at Wal-Mart is likely higher now due to the recent policy of capping wage increases. Store Wars: When Wal Mart Comes to Town (2005). http://www.pbs.org/itvs/storewars/story.html. Retrieved January 22, 2011. Lichtenstein, N. and Johansson, E. (2011). Creating hourly careers: a new vision for Walmart and the country. www.americanrightsatwork.org. Retrieved January 22, 2011. Read More