Walmart added another perk to help reward and retain its employees. On Wednesday, it announced that it will provide a bonus program to qualify eligible hourly workers.
The bonus will encompass those working in Walmart's Vision Center and pharmacy outlets. According to a retail giant report by Reuters, the program aims to improve the compensation of approximately 700,000 frontline staffers.
Qualifiers for the bonus program are employees working both part-time and full-time, according to John Furner, the CEO of Walmart. Workers with twenty years or more of tenure will be qualified for up to a $1,000 annual bonus, while those with fewer than five years would get $350. Furner said the program will also be eligible hourly workers with at least a year of tenure, which will eventually increase with seniority.
Walmart's Bonus Restructuring Plans
Walmart's bonus program follows an announcement in January about bonus restructuring, which grants its store managers in the US up to 200% of their annual salary. In preparation for the company's upcoming annual shareholder meeting, Furner underscored the importance of upholding competitive base wages.
As a retail giant, Walmart substantially influences hourly workers in the overall job market and has long been grappling with recruiting and retaining top talent within a tight and competitive labor market. The company has increased its hourly wages by approximately 30% over the past five years, making the average US hourly wage now nearing $18. Starting pay varies between $14 and $19 to date, depending on the store's location and the local market's condition.
A $1,000 bonus would make employees approximately 50 cents per hour for those working a 40-hour week, which will be roughly 3% of their annual income for full-time workers earning the average hourly pay.
Out of Walmart's 1.6 million US workers, nearly 1.5 million are hourly workers. The new bonus program will encompass roughly 700,000 hourly workers working in stores. On the other hand, store managers and supervisory levels were already eligible for a separate bonus program, which was disbursed in March following the conclusion of the company's fiscal year at the end of January. Walmart also revealed earlier this year that it increased the average pay of its store managers from $117,000 to $128,000, marking a rise of just over 9%.
The Tight Labor Market Giving Positive Effect
According to the US Labor Department's April jobs report, the labor market continues to be tight, falling below 4% for the first time in almost three consecutive years. Meanwhile, Walmart has observed its turnover rate declining among store workers, which Furner suggested is a positive retention rate within the company.
Walmart also introduced an Associate to Technician, a certification program aside from the bonus program, to help workers in areas such as refrigeration and cooling maintenance, facilities maintenance, and automation technician positions transition to much higher-paying positions, with identified staff shortages.
