Walmart Increasing The Salary Of Its Average Store Manager to $128,000

Walmart, a retail giant in the US and the country’s biggest employer, has announced that it will be boosting the salaries of its store managers starting February 1. This move comes as a result of the retail company’s desire to retain its managers

With the demand for store managers projected to grow by 6% until 2028, it’s no wonder Walmart is doing all it can to retain its managers. How did they arrive at this decision? Read on to find out more about the new Walmart raise structure.

Labor Violation Rumors

Despite being a world-renowned retail company, Walmart has been entangled in several suits over allegations of labor violation. In November 2023, a United Nations poverty expert called on the CEO of Walmart, among other retail companies, to address the claims of inadequate pay and misclassification of workers as ‘independent contractors’.

The company has also often been criticized for its policy against labor unions or employees. While the company has not directly addressed these issues, it has improved its reputation and employee morale by increasing employee wages and bonuses over the last few years.

Walmart’s Commitment Toward Employee Compensation

Over the last few years, Walmart has been striving toward providing a better employee pay system. In recent years, the US retail giant has raised the wages of more than a million front-line executives. New executive roles have also been introduced to allow employees to earn and grow more.

Early last year, they set their average hourly wage to $17.5, a slight increase from the $17. While many of their employees comment that there is room for improvement regarding employee compensation, they have said they will continue to strive to provide a competitive and fair pay structure.

The Corporate Changes

Walmart made some changes to its pay structure and job positions in November 2023. The company stated that the changes would mostly affect compensation and job titles. Despite these changes, they stated that the current workers wouldn’t see a reduction in their base pay.

These changes arose because the retail giant needed to change its workforce and compensation requirements. They have also provided college degree requirements for some of their executive roles. Also, these changes would allow Walmart to align their hourly starting pay across all departments and job roles.

A New Era For Walmart Store Managers

Current and future Walmart store managers can access a new salary structure. This decision by them stems from their need to commit to investing in their labor force. The store managers will now earn an average of $128,000 annually, a 9% increase from the previous $117,000 in 2023.

Walmart has not changed the payment structure of their store managers in over a decade. Now, low-earning store managers will receive the highest increase, going from $ 65,000 to $ 90,000, while executive store managers will still earn $170,000.

Bonus Compensation

In addition to increasing the average salary of their store managers, Walmart has also decided to revitalize their managers’ bonus program. The program will now focus on store profits, which will be critical in calculating the managers’ bonuses combined with sales.

Therefore, any manager who hits all targets is entitled to a 200% bonus based on their base salary. Previously, the bonus was based on one and a half of the store manager’s base salary. However, this new decision stems from the need for retailers worldwide to retain and attract more workers while curbing turnover rates and the need for labor organization efforts.

Hourly Workers Are Not Left Out

Aside from increasing the salaries of their store managers, Walmart also decided to increase the average hourly rate of its hourly workers. ‘We are on a journey of investing in our frontline associates,’ said Cedric Clark, the Executive Vice president of Store Operations for Walmart U.S.

Clark, who also started out in the company as an hourly worker, said they would be increasing the average hourly wage to $18, an increase from the $17.50 it was early last year. This latest increase in hourly rates resulted from strong retail growth and a solid wage rise due to the tight labor market.

Walmart Raise Compared To Other Retailers

Compared to Walmart, whose minimum wage ranges from $14 to $19 per hour, Target ranges from $15 to $24 per hour, depending on the location and role. Target previously said that in 2022 it would increase its minimum wage to $24 per hour for hourly workers at its discount stores.

Costco probably has the highest hourly pay for its store workers among all retailers. Costco employees receive a minimum wage of $22.20 per hour, significantly higher than that of Walmart.

Benefits Of Walmart Raise

Employees are crucial to every company’s success. When a company increases its employees’ pay, it makes them feel motivated and appreciated. Walmart’s employee raise has boosted its performance by increasing employee retention and customer satisfaction.

Statistics show that the retail giant has an employee turnover rate of 44%, which is lower than the general retail average of 60%. This shows their commitment to fostering a positive environment for their employees. The statistics also indicate that Walmart provides their workforce with a rewarding and attractive space, allowing for greater interest by potential job seekers.

Final Remarks

Walmart employs nearly 1.6 million workers who operate from almost 5,000 stores in the United States. This makes them one biggest workforce employers in the United States. Given that they have such a large workforce, it is necessary to ensure that their employees are well compensated.

Despite the various allegations of labor violations, Walmart remains dedicated to providing a competitive and fair pay structure for their employees, as evidenced by the salary increases for store managers. These recent changes in bonuses and salaries show that this retail giant is committed to motivating and keeping their workers despite the competitive job market.