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Paper Topic:

WalMart-High Turnover rate of employees

Wal-Mart High Turnover Rate of Employees

High Turnover Rate at Wal-Mart

Wal-Mart stopped publicizing its turnover rate but information pieced together from the firm 's union and other external sources continue to show that the firm has a high turnover rate relative to its competitors The average turnover rate for the entire retail industry in 2006 is 34 .7 percent but at Wal-Mart , some stores have experienced turnover rates of as much as 85 percent and 104 percent (Henderson , 2007 . Although the turnover rate varies per store , the large disparity between the

average turnover rate in the industry and the turnover rate at Wal-Mart stores supports claims of the unprecedented level of turnover at Wal-Mart

Three major reasons explain the high turnover rate of Wal-Mart employees . First , the firm pays an hourly wage barely above the minimum wage . Wal-Mart management disclosed that its average hourly rate is 9 .63 for all its stores in the United States but the workers union states that the average wage is actually 6 .35 per hour for the workers (Wal-Mart Workers Association , 2006 . The higher per hour rate reported by the firm was due to the inclusion of the hourly wage of managers and executives . As such , low wage continues to be a justification for the high turnover rate of employees at Wal-Mart . Second , Wal-Mart continues to move against the complete unionization of its workforce (Wal-Mart Workers Association , 2006 . Although Wal-Mart workers have a union there is little room for the development of industrial relations , more so when the firm has a high turnover rate , resulting to a rapidly changing workforce that prevents collective action much less collective bargaining . Third , the firm prefers to employ workers part time , which prevents workers from achieving regular employment that lessens firm responsibility for legal benefits (Wal-Mart Workers Association , 2006 The uncertain status of employees also contributed to high turnover rate whether Wal-Mart intended this or not

Addressing High Turnover Rate of Wal-Mart Employees

Dealing with high turnover rate of Wal-Mart involves multi-dimensional change involving change in management culture and better wage rates and benefits . While it is true that Wal-Mart 's value offering to customers is low prices , which means it has to manage costs , this implies that it has to weigh the cost of providing higher and standardized wage with the cost of turnover

A look at Costco Wholesale Corp . shows that it has established standardized wages for its nationwide employees at a higher rate than Wal-Mart . It has also established healthcare insurance and other benefits for employees . It carries a more accepting attitude towards unions . Although less than 20 percent of its workforce belongs to the union , this has created a better working relationship between the workforce and employees . With more satisfied employees , Costco not only has a more efficient workforce but also incurs lesser human resource management and operating cost to allow it to offer low prices to consumers . However , Costco admitted that reaching this was not easy since it had to look into...

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