While the labor market remains highly competitive, with wage increases outpacing expectations, it’s no surprise that the biggest retailer, Walmart, is increasing its efforts to attract and retain workers.
Walmart is offering its store managers stock grants, which are based on a manager’s store format, and can range between $10,000 and $20,000. That announcement came on the heels of Walmart’s decision to roll out a souped-up compensation package for managers.
It’s not only managers that Walmart wants to encourage to buy into stock ownership. The company just announced a 3-for-1 stock split, a move that it said was being made in part to allow more employees to buy into its stock purchase plan.
Granting stock to managers en masse is not as common in the retail industry as it is in other industries like technology, finance, and life sciences, industry consultants said. But more companies, including department stores, movie theaters, and restaurants have been thinking about granting equity broadly for mid-tier management as a way to attract and retain good managers, said Aalap Shah, managing director at Pearl Meyer, a compensation and leadership advisory firm. Shah noted the Walmart move is likely to accelerate these discussions.
“It’s not surprising that this is happening now that we’re on the other side of the Great Resignation,” Shah said. Companies are implementing strategies to keep workers “so they can shore themselves up.”
Managers who are given equity have more of a reason to make the restaurant, the store, or whatever location they are managing more their own, which benefits the company overall and should have a positive impact on its share price, Shah said.
What’s more, lower-level workers see a path to greater wealth creation if they stay at the store or the restaurant and work their way into management, Shah said. “You’re giving them an opportunity to earn a grant once they get into the managerial ranks” which promotes self-advancement, working harder, and encourages longevity with the company, Shah said.