November 2016
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Walmart’s Investment in Employees Looks to Be Paying Off

Tuesday, November 1, 2016

Last year, Walmart dedicated itself to investing in its employees, and the return on investment has been impressive. Within the first six months of the campaign, the retail giant’s sales rose by $5 billion, and revenue advanced from $144.2 billion in 2015 to $149.5 billion. The company attributes these gains to the “positive customer traffic” that came as a result of an across-the-board minimum pay increase for employees and the creation of 200 management training centers. Walmart management is discovering that well-paid, better-trained employees create a better customer service experience for shoppers. However, the investment of $2.7 billion in employees is paying dividends in other, related areas. Since the start of the campaign, Walmart has seen a reduction in employee turnover, an increase in the percentage of stores meeting internal goals, an improvement in customer experience surveys, and a rise in spending at stores by employees. However, not all is totally positive. Walmart has seen a decline in operating income, from $9.5 billion to $8.8 billion in the first half of the year, due to higher labor costs and other investments. This doesn’t mean that the experiment is failing, though. Walmart executives understand it takes time to recoup large amounts, and they are optimistic that over time their investment in employees will pay off.

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