Walmart Invests in Upskilling

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The Wall Street Journal ran a story yesterday about how Walmart has started to focus on training its front-line workers.

While many firms have training programs for college graduates and future managers, very few companies train their entry-level service employees.

The practice, known as upskilling, is designed to reduce turnover, which is estimated to be 50% in retail in the first six months, and provide better customer service.

The reduction in turonver could save Walmart tens of millions of dollars per year according to Kristin Oliver, executive vice president of people for Walmart’s U.S. operations.

Under the new program. hourly supervisors will now be responsible for holding their teams accountable, and they will complete a five-week series of workshops and on-the-job exercises designed to equip them with managerial skills, a skill that was often lacking in such “managers”.

The article points out that there is a big question regarding the training program:

Will the new high-road approach improve workers’ long-term career prospects? Reduced turnover, more room to take initiative, more responsibility—all might make the work experience more satisfying. But when workers move on, what will they take away from a Walmart job?

While thousands of employees a year make it to department manager, Walmart also knows that the vast majority vast majority of entry-level workers will eventually leave, and the company says it wants to find an answer for them too—something tangible they can take with them.

The next step for Walmart, in conjunction with others in the retail sector is to develop a certification program for customer service. Such a certification would demonstrate that employees have learned transferable skills that will be valued by other employers across an industry.

As Julie Gehrki, senior director at the Walmart Foundation notes, “This (new training program) isn’t just about workers performing better. It’s about helping employees build the skills to move up.”

I find it quite admirable that Walmart has developed such a training program, particularly since the company has always been known for its focus on cost efficiency. Investing in such a program, along with increasing minimum wages, will cost the company millions. But as noted above, there should be cost savings from reduced turnover and stronger sales as a result of improved customer service.

Walmart has been a favorite target of union activists, health insurance advocates, minimum-wage economists, and late-night comedians for years, so it was nice to read an article about Walmart that has a positive spin to it.

After all, Walmart is a key component of the U.S. economy. Here are some facts about Walmart that you may not be aware of:

    • Walmart is ranked number one in Fortune’s ranking of the world’s 500 biggest firms, as measured by revenue.
    • Walmart is the world largest private employer with 2.1 million employees — only the U.S. Department of Defense and China’s People’s Liberation Army employ more people.
    • While founder Sam Walton felt very strongly that Wal-Mart really was not, and should not be, in the charity business, since his death in 1992, Walmart and the Walmart Foundation dramatically increased charitable giving, with donations approaching $1 billion each year.
    • Walmart created the idea of every day low pricing, which has since become standard practice among many retailers
    • Walmart announced plans in 2005 to transform itself into one of the greenest corporations in the world, with goals such as “to be supplied by 100 percent renewable energy” and to “create zero waste.”
    • While Costco has become the number one seller of organic foods, moving ahead of Whole Foods. Walmart has also become a force in the organic food category with its Wild Oats brand.
    • Walmart was a pioneer in using information technology to track and understand consumer behavior.

So while Walmart has deserved much of the criticism it has received over the years, I think it is also important to be aware of the significant contributions it has made to to the U.S. and global economies.

I wish Walmart the best with its upskilling initiative; now if it would only stop selling guns…

 

 

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Jim Borden

Accounting Prof. at Villanova; happily married for 30+ years; father of 3 outstanding young men; vegan; interests: fitness, creativity, education, blogging, social media.

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