When the coronavirus pandemic first hit, millions of jobs were shed within weeks, and the retail sector was among the hardest hit. That's because many nonessential retailers were forced to temporarily close their doors as stay-at-home orders were enacted in COVID-19 hotspots throughout the country.
These days, retail jobs are a lot more plentiful. But workers don't seem to be biting.
Part of the problem is that right now, workers in about half of U.S. states are collecting an extra $300 a week in their unemployment benefits. That additional money is, in some cases, making it so the jobless earn more on unemployment than they would by going back to work. And while that boost is set to expire by Labor Day, the reality is that other issues, like health concerns and childcare constraints, are also keeping retail workers from going out and applying for jobs.
Of course, if retailers can't hire enough staff, then they can't thrive, nor can they recover from the blow the pandemic may have already dealt them. And that's bad news for real estate investors.
The last thing commercial landlords want right now is a string of retail vacancies. But if stores can't hire, then shuttering may be their only option.
Walmart (NYSE: WMT), however, is taking steps to give itself an edge on the hiring front. And it could be just the thing to help the big-box giant grow its staff.
An employee benefit that's too good to pass up
The cost of college has reached astronomical levels, and students routinely rack up piles of debt on the road to obtaining a degree. Walmart is looking to remove that burden for its staff. Recently, it announced that it will cover the full cost of college tuition and books at certain schools for all of its U.S. workers.
While paying college tuition costs isn't a new offering for Walmart -- it began doing so in 2018 -- the retail giant has expanded the list of eligible programs it will cover and will start paying for books on top of tuition. It will also drop the previously implemented $1 per day investment it imposed on workers looking to take advantage of its tuition program.
The new college program will be available to both full-time and part-time employees. And the company will begin offering more degree and certificate options in areas like business administration, cybersecurity, and supply chain management.
Expanding its college program makes sense for Walmart at a time when hiring is so tough. In June, there were 1.179 million unfilled jobs in the retail industry, according to the latest data from the Bureau of Labor Statistics. By fully covering the cost of college, Walmart could solve that problem and give itself an edge over competing retailers that currently pay a higher base wage.
Earlier this year, Walmart raised wages for 425,000 U.S. workers to at least $13 an hour. But it still maintains an $11 minimum wage, which is below the $15 minimum starting wage competitors like Amazon and Target pay.
The good news for Walmart is that its college tuition program has previously proven successful, so the expanded version is likely to follow a similar pattern. The company says that employees who have participated in the program in the past are twice as likely to get promoted as nonparticipants. Retention rates among participants in the program are also substantially higher.
Will more retailers follow suit?
Retailers across the country are struggling to hire, and while many are taking different steps to draw in talent, like offering hiring bonuses and raising wages, paying for college could be their ticket to really ramping up staff. If more companies follow Walmart's lead, it could help solve the retail hiring crisis -- and help ensure that more physical stores are able to stick around for the long haul.