October 5, 2017

Retail expert talks Walmart’s no seasonal worker policy

WEST LAFAYETTE, Ind. — Purdue University retail expert Richard Feinberg says Walmart’s decision to not hire seasonal workers is a matter of bottom line.

Feinberg, a professor of consumer sciences and retailing, explained increasing hours of existing employees is less costly than interviewing and giving minimal training to new hires. “Walmart increases the probability of greater profits,” he said. “For every dollar of sales Walmart makes, 4 cents are profit. For every dollar saved, Walmart makes a dollar.”

Walmart, which made the same decision last year, plans to increase hours of regular employees to enhance customer service as regular employees are more productive.

“Regular employees have said they like the increased hours because they make more money during the season when they need more money,” Feinberg said.  “That gives them more money to spend at Walmart as well as the local community.

Walmart, which made the same decision last year, plans to increase hours of regular employees to enhance customer service.  Key to that plan is getting shoppers checked out faster and having more registers available.

“Even trained seasonal employees are simply not as effective or productive as existing employees,” Feinberg said. “The truth is consumers do not expect high levels of “touch” customer service at Walmart. Walmart is effectively a self-service establishment. Seasonal employees may do more harm when they talk to customers than good.”

The loser in Walmart’s decision are those people looking for seasonal employment, said Feinberg. “It hurts those people who would have loved a seasonal job because of the discount they receive and their need to make some additional money. If thousands of seasonal workers cannot find a seasonal job, it means less holiday spending in their communities.”

Not all large retailers are following Walmart’s example. Reuters News Service reports Target will hire 100,000 temporary workers, which is 30,000 more than last year. Macy’s is beefing up its distribution centers and warehouses but not the retail establishments. 

Writer: Howard Hewitt, 765-494-9451, hhewitt@purdue.edu 

Source: Richard Feinberg, 765-494-8301, xdj1@purdue.edu 

Note to Journalists: Feinberg is available for interviews.

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