retail news in context, analysis with attitude

• The Wall Street Journal has a story about Walmart's increased training programs...

In Joplin, Missouri, the story says, "the company is testing a new approach: investing in workers through higher wages and training, on the theory that this will pay off all around—for customers, the company and employees. Wal-Mart plans to roll out the new training program to all of its more than 4,500 U.S. stores by early next year, according to Kristin Oliver, executive vice president of people for U.S. operations. And by then, all but the newest Wal-Mart hires will earn at least $10 an hour."

The story goes on:

"One motive is better public relations at a time when inequality is a hot-button political issue. But bottom-line calculations also play a role. Employee turnover costs money—by industry estimates as much as $5,000 per front-line worker, or 20% to 30% of an entry-level salary. Standard turnover in retail is 50% in the first six months. If Wal-Mart can reduce this churn, persuading people to stay at least 12 to 18 months, it will save 'tens of millions of dollars a year,' according to Ms. Oliver."
KC's View:
While Walmart is getting some grief from labor groups about layoffs that are happening even as wages are raised, I think the long term net net could be positive. After all, if Walmart is able to be both more effective and efficient, it will be able to open more stores ... and hire more people at the higher wages. This won;t happen overnight, but it seems to me that this must be the goal.