Walmart’s failure to prioritize workers is threatening its business. A growing body of academic research confirms that adequately investing in talent and improving job quality is one of the most effective strategies toward building a company’s profits and reputation.
Walmart shareholders deserve to know the truth:
- Walmart can’t keep pace with a changing industry.
Walmart ranked near the bottom of a recent survey from the Axios Harris Poll 100 on corporate reputation, 83rd out of 100 total U.S. companies, losing four spots from 2019. Walmart’s share of the e-commerce industry is declining — with just 7% of the e-commerce market compared to Amazon’s 40%. According to a Walmart internal memo, its share in the online grocery market dropped from 40% pre-pandemic to about 31% in February, while Instacart’s share rose.
- Walmart is falling behind its competitors.
Walmart ranks 92 out of 100 for work culture. With a base wage of $11 an hour, Walmart offers far below the $15-16 paid by competitors like Target, Costco, BestBuy and Amazon. Costco’s CEO has said “Paying employees good wages…makes sense for our business and constitutes a significant competitive advantage for us. It helps us in the long run by minimizing turnover and maximizing employee productivity.”
- Taxpayers foot the bill for Walmart’s failure to pay living wages.
Walmart’s notoriously low wages force their associates to rely on taxpayer-funded public assistance: a 2020 GAO study found that Walmart associates are among the top users of taxpayer supported federal assistance like SNAP and Medicaid.
- Walmart’s recent announcements on progress are riddled with fine print.
A set of raises the company touted this year focused on e-commerce workers to the exclusion of cashiers, and were paired with the elimination of quarterly bonuses. The retailer’s restructuring program hid reduced hours, lower pay, increased workloads, and the termination of a set of manager positions under the veneer of greater opportunity for associates. Walmart’s desperate bid to retain workers by shifting from part- to full-time positions made headlines as a partial, insufficient measure.
- Walmart’s paid sick leave policy is a public health hazard.
Walmart has been knocked again and again on its restrictive Covid-19 leave policy and the near-inability for workers to call out sick without risking losing their jobs. During the pandemic, nearly half of associates said they had come into work sick or would do so, for fear of retaliation. Although Walmart has refused to be transparent about the COVID-19 cases and deaths it admits to tracking, a recent report finds that there have likely been over 125,000 cases of COVID-19 and over 2,200 deaths among Walmart associates, leading to potentially countless cases spread throughout customers and their communities.
- Walmart’s response to the pandemic put profits at risk.
Walmart’s numerous store closures resulting from employee sickness has hampered performance, and the company has incurred additional costs as a result of highly-publicized OSHA investigations, Attorneys General of eleven states and the District of Columbia publicly criticizing the company for lack of strong worker health and safety protections, and numerous lawsuits, including one filed alleging the wrongful death of an employee.
- Walmart is continuing to cost itself by its inability to retain workers.
Nearly 10% of Walmart’s workforce, or approximately 150,000 people, went on leave as a result of Walmart’s mishandling of the pandemic and workers feeling unsafe at work. The company found itself needing to hire an additional 200,000 people, a possible indicator of the magnitude of management’s failure to adequately protect and retain staff, and enormous employee turnover like this takes up significant overhead.
- Walmart’s at risk of rapidly losing customers.
Walmart’s inattention to social justice issues risks younger consumers turning away from the brand. Millennials and Gen Zers are the most ethnically and racial diverse group in the country, the most progressive and a growing consumer base whose dollars will be critical for Walmart’s long-term growth; meanwhile, CEO Doug McMillon was notably absent from a list of hundreds of CEOs that signed a letter opposing “any discriminatory legislation” that would make it harder for people to vote.
- Walmart is underutilizing its most valuable resource.
Walmart associates have the solutions to improve employee retention and ultimately increase the company’s performance. Walmart associates stepped up where leadership failed to act during the pandemic, taking initiative to supply and distribute personal protective equipment and to develop and support a public tracker of Covid-19 illnesses and deaths at locations around the country. In front of U.S. senators, associates offered proactive solutions to improve consistent issues with employee turnover; now they are calling on investors to implement a Pandemic Workforce Advisory Council (Proposal 7 on Walmart’s 2021 Proxy) to help the Board navigate the COVID-19 crisis and future pandemics.