Sam’s Club Expands Pay Increases for Front-Line Employees
Membership retail club chain Sam’s Club has unveiled a new approach to workforce compensation, offering a plan that accelerates pay for almost 100,000 front-line associates and providing a roadmap for them to plan and pursue more predictable, longer-term financial futures. According to the retailer, the plan creates opportunities for employees to build better careers and lives with Sam’s Club.
Recognizing that more engaged workers are more productive, provide better service and are more likely to remain in their jobs, Sam’s Club’s plan allows associate hourly wages to progress faster in their pay range, widening the increase to between 3% and 6% based on years of service. The plan establishes predictable pay increase milestones to give associates a longer-term perspective on their financial futures. Now, the average hourly rate for Sam’s Club associates is anticipated to be higher than $19, with the chance to earn thousands of dollars annually in bonuses. In the past five years alone, Sam’s Club average hourly wage has increased almost 30%, according to the chain.
“At Sam’s Club, we believe delivering an unparalleled experience for our members starts with investing in our front-line associates,” wrote Sam’s Club President and CEO Chris Nicholas in a LinkedIn post. “Until now, retail compensation has largely been about hourly wages, and it’s almost unheard of to talk about front-line associate compensation in terms of a predictable financial future – that changes for Sam’s Club starting today. As our associates invest their time, skills and knowledge in us, we’ve been investing in them and their families, creating a place of hope and opportunity through a multi-year journey that has the potential to transform lives. Our new approach is one step in a series of investments we’ve made in our people over the last several years, all designed to provide more meaningful jobs and build successful teams.”
At Sam’s Club, three out of four salaried managers began as hourly associates, and in the past five years, the number of hourly associates promoted to salaried positions has grown nearly 400%.
“To be truly customer-centric, companies must first be front-line focused, and this takes courage and conviction to make big bets on people,” noted Zeynep Ton, professor of the practice in the Operations Management Group at MIT Sloan School of Management and co-founder and president of The Good Jobs Institute. “In 25 years of studying the world’s most influential organizations and their leaders, there’s a clear relationship between good jobs – created through strategic investments in people and thoughtful work design – and strong employee motivation, customer satisfaction and business performance. Sam’s Club’s strategic investments in employees and their work have already fueled productivity, increased sales and built record membership rates. Now, they are continuing to enhance the retail experience for both employees and customers.”
[RELATED: How Sam’s Club Is Transforming the Customer Experience]
Over the past several years, Sam’s Club has invested in wages and benefits, along with tools and technology to make associates’ lives easier. Since 2019, the retailer has made more than a dozen unique wage investments, from starting pay increases to annual stock grants, to help hourly and salaried associates across every level and area of the club.
Pay is just one part of Sam’s Club’s commitment to associates, however. During the same period, the retailer has focused on career growth and creating more opportunities for associates through greater security, flexibility and convenience regarding when and how they work. This includes:
Block schedules for full-time associates to provide a better work-life balance with consistent weekly schedules.
An increase in full-time associates by 11% so even more workers can reach full 40-hour weeks.
New technology such as Me@Sams, an easy-to-use mobile app enabling associates to easily navigate their pay, discounts, learning opportunities and benefits, all in one place.
Workgroups to broaden departmental cross-training and simplifying the types of roles by more than 60%.
The new pay plan for front-line associates will go into effect on Saturday, Nov. 2.
Last January, Sam’s Club parent company, Walmart, unveiled a plan to simplify the pay structure of its store managers and redesign their bonus program, the latter of which will give store managers the chance to earn an annual bonus that’s up to 200% of their salary. Under that plan, store managers’ average salary increased to $128,000 per year from $117,000 a year. Walmart’s investment in its store managers followed years of wage investments in its front-line hourly associates.
Sam’s Club is a division of Bentonville, Ark.-based Walmart Inc. The company operates 600 clubs in the United States and Puerto Rico. Meanwhile, Walmart operates more than 10,500 stores and numerous e-commerce websites in 20 countries. Walmart U.S. is No. 1 on Progressive Grocer’s 2024 list of the top food and consumables retailers in North America, and Sam’s Club is No. 8. PG also named Walmart one of its Retailers of the Century. Sam’s Club was the recipient of PG’s inaugural Innovation Awards in the Large Chain category (300-plus stores), presented this past June at the publication’s 2024 GroceryTech event in Dallas.
