After it raised wages for employees in April, Walmart said on Friday that it’s already seen lower turnover and an increase in job applicants.
“Our job applications are going up and we are seeing some relief in turnover,” CEO Doug McMillon said at a media briefing after its annual shareholders meeting. The company’s performance has been suffering recently thanks to understaffed stores, among other things.
The company announced that all workers would make at least $9 an hour this year, a minimum that would increase to $10 an hour in February. The company’s rationale at the time was that it would reap the benefits of its $1 billion investment in higher wages through lower turnover, which is apparently already playing out.
Turnover can be quite costly: it eats up the equivalent of a fifth of a worker’s salary to replace him. Higher wages have been found to stem a tide of fleeing workers, however: two different reports found that increased wages lower turnover as well as increase recruitment and employee performance.
McMillon said Walmart might consider going even further than a base wage of $10 an hour in the future to keep attracting and retaining employees. “This won’t be the last jump,” he said. Workers have repeatedly gone on strike to demand that they make at least $15 an hour, be given more predictable schedules, and have the right to form a union.
Other employers have also decided to raise wages in recent months with many of the same justifications as Walmart’s. The Gap and TJX, owner of TJ Maxx and Marshall’s, increased their base wages to $10 and $9, respectively, in the hopes of attracting and retaining better talent. Target also increased wages, as did McDonald’s, but only for those who work at its company-owned stores, which are a small share of its overall locations.