Wal-Mart Stores Inc. (WMT) is hiring 55,000 seasonal workers and adding another 70,000 part-time and full-time workers as it gears up for the holiday season and reverses workforce reductions that have made it hard to keep store shelves stocked.
The company is moving 35,000 part-time workers to full-time status and is elevating another 35,000 to part-time from temporary, the Bentonville, Arkansas-based retailer said today in a statement. The 70,000 workers will be elevated in the next few months and will keep their new posts after the holiday season ends, said Kory Lundberg, a Wal-Mart spokesman.
Wal-Mart usually hires temporary workers to get ready for the holiday shopping season. The company is adding more permanent people to improve customer service after failing to keep shelves stocked and handle other store-level operations, said David Galper, head of retail and apparel investment banking for KeyBanc Capital Markets Inc.
“They’re competing more and more for consumers’ dollars,” he said in a telephone interview. “They want to have sufficient employees to get the right product to the right shelf at the right time.”
While the move will add “an incremental cost” on labor, it could help the company “capture additional sales,” he said.
Wal-Mart rose 0.8 percent to $76.42 at the close in New York. The shares have advanced 12 percent this year, compared with a 19 percent gain for the Standard & Poor’s 500 Index.
Last year, the company hired 50,000 seasonal workers.
The U.S. workforce at Wal-Mart’s namesake and Sam’s Club warehouse chains fell by about 120,000 employees in the past five years, to about 1.3 million, according to regulatory filings. In that time, the company has added more than 500 U.S. stores through July 31. That workforce decline has coincided with customer frustration that there aren’t enough employees to keep shelves stocked, cash registers manned and shoppers’ questions answered, Bloomberg reported earlier this year.
Cleveland Research Co. said in a Sept. 18 report that “one of the key issues” hindering Wal-Mart’s store operations “is the lack of labor in the stores to get the inventory out of the back rooms and onto the sales floor.”
Wal-Mart knows when drops in customer satisfaction have an adverse impact on sales, said Bryan Gildenberg, an analyst at Kantar, a London-based consulting and research firm.
“They’re trying to figure out how to get optimal staffing coverage back in their stores,” he said in an interview.
New full-time workers are eligible for benefits after working six months, said Randy Hargrove, a Wal-Mart spokesman. Beginning Jan. 1, to comply with the Affordable Care Act, that will become a 90-day waiting period, he said. New part-time workers are eligible for benefits after one year, provided they work an average of 30 hours a week over the course of that year, he said.
At Wal-Mart, employees who consistently work 34 or more hours a week are considered full time, and those who regularly work fewer than 34 hours are part-time, Lundberg said.
Wal-Mart cut its annual profit forecast after same-store sales fell 0.3 percent in the second quarter.
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