Sam's Club boosting pay for workers

Published On Sep 17, 2024, 6:01 AM

Sam's Club, a warehouse retailer owned by Walmart, is increasing the pay for around 100,000 frontline workers. Over the past five years, the average hourly wage for associates has risen nearly 30%, and with the new plan, wages will increase between 3% and 6% based on years of service, with average hourly wages expected to exceed $19. This strategy aims to reduce the employee turnover rate, which averaged 60% in the retail sector in 2022, by enhancing employee engagement and retention. The raise arrives as retailers gear up for the upcoming busy holiday season, during which many are expanding their workforces.

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This pay increase may lead to higher employee satisfaction and retention, positively impacting customer service, which is critical for membership renewal. Higher wages can also enhance operating margins in the long run if it translates into better productivity and reduced recruitment costs. However, there could be short-term costs associated with wage increases.

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