In an exclusive and wide-ranging interview with ABC News, Walmart U.S. President and CEO John Furner spoke about the retail giant's efforts to hire more workers without college degrees as high-paying company employees.
Today, 75% of Walmart's payroll managers started out as hourly employees. High-performing Walmart Supercenter managers now have the ability to earn more than $400,000 annually, including a new stock-based compensation program. Some of these managers have college degrees, while others do not. It's not required for the job.
“College is great for some people, but it's not necessarily the right answer for everyone,” Furner told ABC News.
Walmart announced this year that it has doubled the number of skills certificates it offers to help people land high-paying careers within the company, including software engineers, data scientists and opticians. Walmart says certification programs take employees about four months on average to complete, while degrees can take several years.
“Say you want to be an engineer and work in HVAC, or maybe you want to be a truck driver, or a robotics technician, or a pharmacy technician. We have a program where you can put that into practice, and it can lead to a great career,” Furner said.
Companies are increasingly removing college degree requirements from some job descriptions and moving toward skill-based hiring. However, a recent report from the Burning Glass Institute and Harvard Business School found that most companies that claim to hire skills first are actually failing to do so.
According to the report, Walmart was among the 37% of companies analyzed to hire an average of 18% more employees without a college degree in jobs that eliminated the requirement for a college degree. Other so-called skills-based hiring leaders include Apple, Cigna, ExxonMobil, General Motors, Target, Tyson Foods, and Yelp.
Walmart is hosting its first opportunity summit in Washington, D.C., this month, bringing together executives from more than a dozen major companies, including Accenture, Home Depot, McDonald's, PepsiCo and Verizon, to discuss how they can coordinate efforts. We discussed. And keep your promise to provide high-paying jobs to workers without degrees.
As the cost of a college education continues to rise, there is a shift towards skills-based hiring. Schools such as Boston University, Tufts University, and New York University now cost nearly $100,000 a year to attend.
“Many of the skills we talk about can also be applied to many companies in different industries,” Furner said. “What we want is for people to learn more and stay with us, but we know that sometimes they move on to other things. We will all be better off if we can take advantage of it.”
Job growth is expected to continue as Walmart aims to open its first new store in three years. The company plans to open 150 new stores and renovate 650 existing stores over the next five years.
Retail theft and the future of self-checkout
Farner acknowledged that the prevalence of shoplifting and organized retail crime across the country remains a challenge for retailers of all sizes. Over the past two years, Wal-Mart has seen an increase in shrinkage (an industry term for lost merchandise due to theft), he said. In response, major retailers are selectively removing self-checkout counters from some stores where shoplifting and mis-scanned items are common, but Farner told ABC News that Walmart will no longer have self-checkout counters. He said it would not be done.
He said, “There are a few stores that have decided to withdraw, but not all of them have made the decision.'' “Over the next few years, we will be working hard on new types of technology that can further improve the checkout process for our customers.”
Target recently announced it would limit the number of items shoppers can purchase in its self-checkout lanes, while Dollar General plans to remove self-checkout counters from 300 of its stores.
“The concern for the industry is that prices could go up and stores could close,” Farner said of the issue. “Retailers must work with state and local law enforcement and federal enforcement agencies to keep communities safe for customers and lower costs of goods.”
Deflation is appearing at Walmart
When it comes to inflation, Farner said he continues to see improvement, saying, “At Walmart, prices are now where they were 12 months ago. We haven't been able to say that for several years.”
Farner also sees deflation in large categories such as miscellaneous goods, with some prices now lower than they were a year ago. “In recent weeks, we have further reduced prices in areas such as produce, meat and fresh produce,” Furner said.
But Furner said he remained optimistic despite the recent rise in overall inflation over the past three months.
“What we've learned over the last few years is that it's very hard to predict. We feel like we're a lot better off than we were a year ago on inflation from a pricing standpoint, but we're not done yet,” Furner said.
