Temp Staffing Strategy: Walmart's BIG Gamble

Walmart Stores, Inc. has a new staffing strategy and that is focused on temp employment. A recent survey showed that the shopping giant has moved to mostly hiring only temp employees for the past several months. Is this cost cutting move? Does it impact organizational culture? Is it a work around for the forthcoming Affordable Care Act? Does anyone really care?

I'm curious to what temp staffing firms are experiencing. Are you seeing a rise for your services? Is Walmart starting a new trend?

Walmart Stores Inc. has in recent months been only hiring temporary workers at many of its U.S. stores, the first time the world's largest retailer has done so outside of the holiday shopping season.

A Reuters survey of 52 stores run by the largest U.S. private employer in the past month, including one in every U.S. state, showed that 27 Walmart stores were hiring only temps, 20 were hiring a combination of regular full, part-time and temp jobs, and five were not hiring at all. The survey was based on interviews with managers, sales staff and human resource department employees at the stores.

The new hiring policy is to ensure "we are staffed appropriately," when the stores are busiest and is not a cost-cutting move, said company spokesman David Tovar. Temporary workers, he said, are paid the same starting pay as other workers. Using temporary workers enables the company to have adequate staff on busy weeknights and weekends without having to hire additional full-time staff.

Tovar said fewer than 10 percent of its U.S. workforce is temporary -- or what the company internally calls "flexible associates" -- compared to 1 to 2 percent before 2013. The majority of its workforce is still regular full-time staff, he said.

Walmart U.S. Chief Executive Bill Simon also confirmed that the company is hiring more temp workers. "Their hours flex by the needs of the business from time to time," he told reporters the day before Walmart's annual meeting last week.

The hiring strategy could save Walmart money by trimming labor costs at a time when its margins remain under pressure. Many consumers are still struggling given a high jobless rateand lack of income growth, leaving retailers of everyday goods with little pricing power, according to other company CEOs and benefits experts. Competition from dollar stores, otherbig box discount chains and grocery stores is also intense.

It also could set an example for some other companies as they look for ways to cushion themselves from a potential rise in healthcare costs next year as a result of President Barack Obama's health care reforms, according industry experts and retail executives. Tovar said that the move wasn't related to these reforms, commonly known as Obamacare, but he did acknowledge that it could take a year or more for temporary workers to receive health care benefits. Turnover in retail often occurs within the first few months.

Courtesy of AOL JobsCLICK HERE for full story.

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