Wal-Mart Stores Inc has in recent months been only hiring temporary workers at many of its U.S. stores, the first time the world’s largest retailer has done so outside of the holiday shopping season.
A Reuters survey of 52 stores run by the largest U.S. private employer in the past month, including one in every U.S. state, showed that 27 were hiring only temps, 20 were hiring a combination of regular full, part-time and temp jobs, and five were not hiring at all. The survey was based on interviews with managers, sales staff and human resource department employees at the stores.
The new hiring policy is to ensure “we are staffed appropriately,” when the stores are busiest and is not a cost-cutting move, said company spokesman David Tovar. Temporary workers, he said, are paid the same starting pay as other workers.
Using temporary workers enables the company to have adequate staff on busy weeknights and weekends without having to hire additional full-time staff.
Tovar said fewer than 10 percent of its U.S. workforce is temporary – or what the company internally calls “flexible associates” – compared to 1 to 2 percent before 2013. The majority of its workforce is still regular full-time staff, he said.
Walmart U.S. Chief Executive Bill Simon also confirmed that the company is hiring more temp workers. “Their hours flex by the needs of the business from time to time,” he told reporters the day before Wal-Mart’s annual meeting last week.
The hiring strategy could save Wal-Mart money by trimming labor costs at a time when its margins remain under pressure. Many consumers are still struggling given a high jobless rate and lack of income growth, leaving retailers of everyday goods with little pricing power, according to other company CEOs and benefits experts. Competition from dollar stores, other big box discount chains and grocery stores is also intense.
It also could set an example for some other companies as they look for ways to cushion themselves from a potential rise in healthcare costs next year as a result of President Barack Obama’s health care reforms, according industry experts and retail executives. Tovar said that the move wasn’t related to these reforms, commonly known as Obamacare, but he did acknowledge that it could take a year or more for temporary workers to receive health care benefits. Turnover in retail often occurs within the first few months.
Wal-Mart’s U.S. staffing has remained relatively flat even as more stores have opened in recent years. At the end of fiscal 2013, Wal-Mart had “more than 1.3 million” workers in the United States, the majority of them at 4,005 Walmart U.S. stores, compared with “approximately 1.4 million” workers in the United States at the end of fiscal 2009, the majority of them at 3,656 Walmart U.S. stores, according to the company’s annual filings for both years.
The temporary workers are often being hired on 180-day contracts, according to the survey of Wal-Mart stores. The temps could eventually be hired for a regular full or part-time job or they could reapply for their temporary position, the Wal-Mart staff said.
Temp workers typically have a completion date after which they have to reapply for work, but part-time employees work fewer hours than full-time workers indefinitely.
“Full-time people are getting slimmer and slimmer,” said a supervisor at a store in North Carolina, who asked not to be named, as did other store-level employees who were interviewed for this story, because she is not authorized to talk to the media.