- This is an excerpt from a story delivered exclusively to Business Insider Intelligence E-Commerce Briefing subscribers.
- To receive the full story plus other insights each morning, click here.
Walmart is implementing a new employee structure in stores in response to shifting shopping habits and employee demands, The Wall Street Journal reports. The net effect in some cases will be fewer midlevel, in-store managers who will be paid more and hold more responsibility.
Business Insider Intelligence
Under the new model — which is already in place in around 75 locations and is expected to come to over 50 new supercenters next month — store managers will remain on top and will have around a half-dozen "Business Leads" under them managing finances and hiring directives, according to Bloomberg. Those supervisors will have "Team Leads" who will supervise groups of eight to 10 front-line employees.
Here’s what it means: This employee restructuring, along with automation initiatives and heightened associate responsibilities, can help streamline Walmart’s labor force.
- Walmart’s been leaning more heavily on existing associates to handle more work.The retailer has been favoring elevating the responsibilities of current employees over hiring more associates. For example, during the 2018 holiday season, Walmart optedto offer extra hours to its permanent workers instead of pushing to hire seasonal labor. And it’s also been working to replace its greeters with "customer hosts" that have extra responsibilities beyond just greeting customers at 1,000 stores across the US. Raising employee responsibilities instead of hiring new associates, while also boosting the effectiveness of store management, can help Walmart keep its labor force lean, keeping costs low.
- The retailer is making increasing use of automated solutions in stores. Walmart’s been rolling out autonomous floor cleaning robots, shelf-scanning robots to manage inventory issues, automated conveyor belts to more quickly scan and sort items from delivery trucks, and pickup towers to facilitate pickup of online orders. All of these measures help handle more mundane tasks that would otherwise fall to associates, freeing up those employees to work on more important or customer-facing jobs and making it easier to have a more streamlined staff.
The bigger picture: As Walmart works to maximize labor efficiency, it will need to be careful not to alienate workers or consumers with the tactics it uses.
- The retailer will want to avoid overworking or discouraging workers as it restructures employees. While elevating the responsibilities of current workers is a smart strategy, if Walmart takes it too far, employees may become strained to fulfill their duties, leading to poor morale and, potentially, more difficulty drawing talent if the company gets a reputation for overworking associates. Furthermore, as Walmart restructures, the prospect of fewer management positions in stores may cause existing middle managers to panic about losing their jobs as well.
- Walmart also has to be conscious of how consumers will react if it decides to lay off workers to lower costs. Walmart has struggled in the past from reports of employees having to deal with issues like low pay, unfair sick day policies, and gender discrimination. If it should decide to lay off workers as it automates tasks and gives employees more responsibilities, it could hurt the public’s perception of the company and cause some consumers to stop shopping with it.
Interested in getting the full story? Here are two ways to get access:
1. Sign up for the E-Commerce Briefing to get it delivered to your inbox 6x a week. >> Get Started
2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to the E-Commerce Briefing, plus more than 250 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
- THE IN-STORE CHECKOUT REVOLUTION: How payments companies can take advantage of a $21 billion opportunity
- Nordstrom Local is coming to New York City
- Walmart is trying to rally workers around gold stars and ‘attitude cards’ as part of a massive store-level shakeup