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Sam’s Club will bump its starting wage to $16 and accelerate pay increases for nearly 100,000 front-line workers, Chris Nicholas, president and CEO, said in a Tuesday statement.
Employees’ average hourly rate will be around $19 — a figure that has increased nearly 30% in the past five years, a company statement said.
Associates will receive increases from 3% to 6% “based on years of service,” Sam’s Club said. “The plan sets predictable pay increase milestones to give associates a longer-term perspective on their financial futures.”
The scope of increased wages & retention
Previously, research indicated that pay increases would be a “modest” 3.9% in 2024. In the here and now of salary increases, that figure was ultimately 3.8%, but employers told The Conference Board that compensation budgets are projected to increase in 2025.
That may be in part because of the slowed hiring pace also projected in 2025. Dana Peterson, chief economist at The Conference Board, said in a statement that a shrinking labor supply is “driving businesses to focus on retaining their current workforce, leading to sustained salary increases and higher real wage growth as inflation moderates.”
Catering to its current workforce was a theme throughout Sam’s Club press statement: The company expressed the desire to “[accelerate] pay for nearly 100,000 frontline associates” and give workers a “roadmap” to plan their future.
How investing in workers is a competitive advantage
Likewise, Sam’s Club said that its new approach is just “one step in a series of investments” made over the past several years, “designed to provide more meaningful jobs and build successful teams.”
Additionally, increased compensation is crucial for companies to remain “competitive,” said Diana Scott, The Conference Board’s US Human Capital Center Leader.
“Given fluctuating market conditions, leaders are increasing their use of compensation strategies that aren’t tied to base pay, like performance initiatives and other strategic priorities,” Scott said.
“In an increasingly competitive retail landscape, attracting, hiring and, more importantly, retaining quality talent has become a true competitive advantage,” said Sam’s Club, adding that “good jobs” and “fulfilling careers” create the most engaged, productive and retained workforce.
via https://www.aiupnow.com
Caroline Colvin, Khareem Sudlow
