Image: Wal-Mart worker
Douglas C. Pizac  /  AP
Wal-Mart announced this week it would change how it sechdules employees so more would be working when shoppers were most likely to be shopping.
updated 1/7/2007 4:41:24 PM ET 2007-01-07T21:41:24

Sometimes it just pays to get back to basics.

That seems to be the plan Wal-Mart Stores is undertaking as it unveils its new plan for a flexible workforce — one that will force store employees to adhere to a work schedule that bends to the demands of customer shopping habits. It's a plan that's aimed directly at the bottom line despite the risk of more bad public relations on worker issues, something the company believes shareholders are ready to cheer.

The early indications are promising. Wal-Mart stock rose $1.37, or 3 percent, on Wednesday to $47.55, pushed by the announcement of the new workforce plan and by a December sales report that slightly beat expectations.

The program, already piloted in 39 stores, will roll out across all U.S.-based Wal-Mart locations by the end of 2007, affecting about 1 million workers, according to company spokesman John Simley.

The purpose, of course, is to meet heavy shopping hours with more store help, while scaling down during slower periods, generally weekday afternoons. Shorter lines at the register mean more happy customers who are more likely to return. That's more important to the business than a cashier, unhappy about spreading her work week over four days rather than three, quitting and not returning.

"Our surveys indicated that customers had a better shopping experience (with the new arrangement)," Simley says of the pilot.

Indeed, in many of Wal-Mart's largest stores — like its supercenter in the Pennsylvania town of East Stroudsburg — congestion at peak times can often become overwhelming. Checkout lines for 10 or more people lead to grumbling by frustrated shoppers who see large numbers of empty cash registers with a few frazzled clerks dealing with customers whose carts are filled to overflowing with low-price bargains.

The move is a something of a departure for Wal-Mart, whose concentration over the past year or so has mostly been aimed at pacifying critics who decry the company's alleged shabby treatment of its hourly workers. The company has tried everything from improved family health coverage to $4 generic drugs. It has also started offering up organic food and bookstores in its newer urban locations, the backyards of the company's most vocal liberal critics.

While Wal-Mart's core rural customers continue to show up in droves, the company's next growth frontier, the heavily unionized big cities, has been held up by local politicians looking to score points by publicly supporting worker interests. Wal-Mart's efforts to make nice haven’t yielded many results yet. Urban growth has been slow going, along with the company's stock. Wal-Mart shares edged down 1 percent in 2006, a year that saw a 16 percent increase in the Dow Jones industrial average. The company's shares are off 20 percent over the past five years.

"The loudest critics now are the investors," says retail consultant Doug Fleener of Dynamic Experiences Group in Lexington, Mass. And perhaps they now have a bigger piece of the company's ear than the unions and other social critics do. The workforce announcement is already drawing union wrath, but of course that's nothing new. The United Food and Commercial Workers already devote 10 pages of their Web site to Wal-Mart bashing, so what's one more?

And Wal-Mart is not the first retailer to invest in software-generated workforce optimization, points out Edward Jones retail analyst Stephanie Hoff. Target and Lowe's are two major chains that have already rolled it out companywide in the U.S. It's just that when you're the biggest player on the block, everything you do will draw reaction.

"If anything, Wal-Mart is a little behind the curve on this," Hoff says.

The only real risk Wal-Mart seems to be taking, experts say, is losing talented people who could become unhappy with the new scheduling arrangements. Unemployment is low, and urban areas in particular bring more competition for competent workers. But even that concern is minimized at a store that specializes in selling basic, everyday goods, according to Fleener.

"You can get away with it at a big-box store, with mostly lower skilled retail positions," he says, noting that a specialty electronics chain like Best Buy generally requires more knowledgeable workers. "They'll probably see some turnover early on, but not a mass exodus."

By itself, optimizing human resources can't provide more than a minimal boost to Wal-Mart's bottom line. Meanwhile, the jury is still out on whether the company's foray into more upscale goods, a move aimed at retaining customers who have begun to climb the economic ladder, will work.

"Wal-Mart's biggest issue is figuring out who its customer is," Fleener says. "You can't be all things to all people."

© 2012


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