Employees at Wal-Mart Stores Inc. have seen what the best-case scenario looks like.
They have an example in Doug McMillon, whose path from the loading dock to the CEO's chair is well documented. What hasn't been as clear, and what the company is aiming to achieve with new training initiatives, is how employees can work toward their own best-case scenario.
"The example of Doug McMillon is a great one in that it sets a tone and an aspiration for a workforce, but that isn't enough," said Matthew Sigelman, chief executive officer of job market analytics firm Burning Glass. "It illustrates the culture that anything is possible for anybody, but a company can't leave it up to fate or accident. There has to be a road atlas."
Wal-Mart announced Feb. 19 that it is investing $1 billion this fiscal year in initiatives aimed at improving the experience of its workers. Wage increases grabbed most of the headlines, but the plan teased by McMillon also included scheduling and training upgrades for the retailer, which has nearly 1.2 million employees in the United States.
Sigelman, whose company worked with Accenture and Harvard Business School on a study of middle-skill workers, found that retail is fertile ground for entry-level workers to grow. Companies like Wal-Mart, the study said, must use the same "rigor and discipline" for developing the workforce that they traditionally use for developing their supply chains.
McMillon acknowledged the need to "create clearer pathways for associates to progress within the company" during the company's fourth-quarter earnings call. McMillon later said the company is trying to create "an environment where people want to work at Wal-Mart, and want to stay at Wal-Mart and want to achieve things that might have been beyond their dreams when they started."
Wal-Mart's training program -- Pathways -- includes retail math in addition to skills training for customer service, teamwork and communication.
The program has been in development for more than a year and is currently being piloted in Joplin, Mo. Wal-Mart will expand the pilot throughout Missouri and the region this year with the goal of launching the training in all 4,500 U.S. stores for all new hires by Feb. 1, 2016, said Kristin Oliver, executive vice president for human resources.
New hires will earn $9 per hour during the training process. They'll be eligible for $10 an hour upon completion. Employees going through the program are paid for training, which they supplement with hourly job duties.
"We're clear with them from the beginning what the future paths are," Oliver said. "They go through the six-month training period before they indicate if they'd like to pursue being a specialist or an hourly supervisor."
Wal-Mart is hoping its program will help employees understand why they matter to the customer experience and the bottom line. Improvements to scheduling being piloted throughout the country are also part of the push to improve morale in stores.
All of these employee-focused initiatives are good for the workers, but the company hopes to benefit its bottom line as well. McMillon noted that the plan is to create a happier workforce that will in turn create better-run stores where customers are happier to shop.
Wal-Mart posted same-store sales increases for consecutive quarters to close out its 2015 fiscal year. It saw increased foot traffic for the first time in nine quarters, and executives said they see plenty of room for improvement.
Customer satisfaction is low for most discount stores, according to the American Customer Satisfaction Index, but the numbers are particularly troubling for Wal-Mart. It ranks last behind 12 other competitors in the discount and department store category with a score of 68. Nordstrom leads the category with a score of 86, which is derived from rankings that include convenience of store location, layout and cleanliness of store and the time it takes to checkout at a store.
Among 18 competitors in the grocery category, Wal-Mart also ranked last with a 71. By comparison Wegmans and Trader Joe's ranked No. 1 with scores of 85. Roughly 70,000 shoppers are polled annually by the index.
"There does seem to be recognition at the highest levels to generate better employee satisfaction,"American Customer Satisfaction Index managing director David VanAmburg said of Wal-Mart's recent initiatives. "Better employees mean happier customers. That's really what they need now. It's safe to say the days of Wal-Mart being able to dictate price and differentiate solely on price are pretty much over."
Wal-Mart plans to use the training program to help retain top performers who join the company in entry level jobs. Those employees who complete the six months of training and have aspirations within the company might then have additional training options, something Oliver said the company is considering and developing.
Training has been developed centrally within the Wal-Mart home office and will be carried out at the store and department level. International divisions of Wal-Mart like the retailer's operation in Mexico will develop their own training programs.
If Wal-Mart can maximize the program remains to be seen, but Sigelman said it is a good start. Training, according to the Burning Glass study, is "a business imperative for companies and not just an act of civic-mindedness or an exercise in corporate social responsibility."
In-house training helps companies eliminate prolonged job searches. Employees who know they have a path beyond their current role tend to perform better. Only 41 percent of employers studied by Burning Glass, Accenture and Harvard Business offer "any type of internship or apprenticeship for middle-skill jobs.
"It's incumbent on employers to do their part to make sure workers know how to progress," Sigelman said. "It serves workers, but ultimately it's to the employers own benefit. Not only do they get more loyal employees, lower turnover, but it means they wind up having a good pipeline of talent into the kinds of jobs they would otherwise struggle to fill."
SundayMonday Business on 03/02/2015