Recently, Wal-Mart began piloting an initiative to train entry-level service workers through a 6 month blended learning program. The corporation will implement this training program nationwide in more than 4,500 U.S. stores in early 2016. Most notably, this program fundamentally challenges the company's well-known mantra of low-costs and efficiency by developing a new model based on investing in workforce development. This shift has tremendous implications for millions of entry-level workers across the service industry, especially for the retail, foodservice, and hospitality spaces.
Corporations Invest in "Upskilling' their Employees
Many big Fortune 500 companies and corporations large and small in the retail and service sector are adopting a new mantra of investing in entry-level employees rather than cutting costs, and in turn, are seeing some major payoff. Several benefits to this model include helping to reduce employee turnover, improving customer service through employee training, and gaining positive PR. This trend is being pioneered by the likes of Pepsico, McDonald's, Starbucks, Goodwill, Gap Inc., Chipotle, and many others who are implementing their own training and educational campaigns to provide opportunities for upward mobility for their employees.1
Though investing in workers is more costly up front, these big corporations are aiming to benefit from increased worker productivity from this investment in workforce development initiatives, which ultimately can be the better choice cost-wise than keeping labor costs down. Employee turnover for front-line workers is as much as $5,000 per worker, based on industry estimates, and with retail employee turnover at 50% in the first 6 months, this is a costly cycle for a company to maintain.2
For Wal-Mart specifically, these new opportunities open doors for retail workers to learn practical drills and bigger picture training. The training program, called "Pathways," blends instruction on computer modules and hands-on training in the store.The modules are designed to be fun and game-like, to keep employees engaged. After 6 months, new employees have an assessment and the opportunity for a raise or advancement towards a new position.
With these new training modules, supervisors are given more authority and accountability over their teams, and benefit from skills training through workshop series and exercises. This focus on training opens the door for employees and their supervisors to understand all available career pathways within the company. Employees now have the chance to move up, gain specialized training, and earn higher salaries.
A Major Opportunity to Develop Industry Credentials
Wal-Mart's goal is to eventually create universal retail credentials in order to equip employees with transferable skills that they can take with them to their next job if they don't move up in the company. This presents industry leaders with a major opportunity to develop universal credentials for other front-line service jobs such as food service, hospitality and retail markets. If this were to happen, entry-level employees can have the opportunity to build transferable skills as they move along from job to job, gaining industry-recognized certifications.
Providing employees with opportunities for upward mobility and upskilling might soon become an expectation from employees, let alone a good idea. Companies will need to remain competitive in order to retain employees by offering training and educational opportunities that are relevant, interactive, and meaningful for career-building. To do so, employers can partner with education providers to deliver retention solutions for their frontline employees. Though the expectation that all employers must provide meaningful career pathways solutions for their frontline workers may be a bit further down the road, this employee-first trend doesn't seem to be slowing down any time soon.
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