Lee Scott’s Regret: Not Promoting Retail Jobs
By Tom Ryan
Lee Scott, the former chief executive officer of Wal-Mart
Stores Inc., admits to one regret about his nine-year helm of the world’s
largest retailer: not doing enough to promote retail jobs.
Speaking at the CIES World Food Business Summit in New York
on Friday, Mr. Scott, now chairman of Wal-Mart’s executive committee, said
that since he first announced intentions to leave the CEO post in November
2008, people have often asked if there was anything he had wanted to accomplish
before his exit.
"The answer was, of course, one place I would have liked
to have done more is helping people understand that Wal-Mart jobs, retail
jobs in general, are good jobs," Mr. Scott said, according to a report
in Reuters. "They pay well and they offer extraordinary opportunities.
But the fact is, you just can’t do everything."
Mr. Scott’s comments were somewhat ironic given that employment
issues were one of his biggest headaches during his tenure. Labor groups
and politicians regularly accused Wal-Mart of mistreating employees, paying
low wages and not offering adequate health care coverage.
In the latter part of his term, Mr. Scott worked to counter
those critics. Under his leadership, Wal-Mart expanded the health care
plans it offered U.S. employees, and also joined a coalition of labor groups
and businesses pushing for
"quality, affordable" health insurance coverage for all Americans
by 2012. Ending years of legal battles around its treatment of workers, the
retailer in December said it would pay up to $640 million to settle 63 class
action lawsuits that accused it of wage violations.
Discussion Question: Is the industry
doing enough to promote retail jobs? How can retailers compete against
other industries more effectively for top talent?
For many, not all, retail is an outstanding career choice. I would guess that anyone reading this post has made for themselves a great career in retail. So I think I’m probably preaching to the converted here.
I’ve stood on my soap box many times extolling the virtues of a career in retail…rapid advancement, multiple ‘careers’ within the same company, pay rates that are ever increasing, challenge, rewards, flexibility, and more.
Could retail do more to make it more appealing as a place to work and grow? Of course. But then again so could the financial sector, manufacturing industries and mining businesses of the world.
Retail is getting better and better. We all just need to keep getting the word out.
For a certain skill set, retail is the only way out. No wonder retail jobs are still seen as Ted Bundy with Married With Children as a loser. The larger retailers–Wal-Mart included–have continued to hire the lowest common denominator which makes the entire industry look upon poorly.
Could bigger players do a better job at promoting retail? Absolutely. You know how? Hire the best to interface with the customer, not those who will endure and project their suffering on the rest of us.
Journalism, food manufacturing, consulting and food retailing–they have all been part of my career’s passing parade. The best part of those diverse activities was being able to mingle daily with America’s ever-changing pattern of human beings, a “value” offer mainly through retailing.
Retail is a vital, interesting–albeit a bit maligned–industry. It, just like American manufacturing, needs to promote its “involvement value,” its human quality and its meaning. Hopefully we shall see retailing find its way into the hearts of financial America and have the value of its workforce become more magnetic and more in demand.
There’s a difference between a job and a career. I believe Mr. Scott is talking about careers. Hourly people that are just taking a 9-5 job to get by is not the topic but anyone who has ever managed a workforce of this type knows the headaches. Yes, Wal-mart was plagued with claims and other negative media for the hourlys; managing a workforce of hourlys of this size is no small undertaking.
Retail careers on a whole have not been promoted. One of the areas Wal-Mart has done well has been developing their people. Lee himself started in warehousing and logistics, along with Mike Duke, Rolin Ford and many others.
Moving leaders through every aspect of your business is important, so when the time comes for them to step up they have a well-rounded knowledge and can be more effective. Developing programs in Universities and Colleges to diversify the retail offerings and supplement with all areas affecting retail will have more talent graduating with interest in retail and this would be good for all.
There is a huge stigma associated with retail. I posted a comment about ‘fallback jobs’ a while ago and I agree, a lot more has to be done to reverse that stigma. Some companies have done excellent jobs of polishing up their opportunities but the focus needs to be with the front-line associates. That is where quality really counts. It’s interesting to note Mr. Scott’s regret considering his previous employer is one of the biggest causes of that stigma.
Late last year, Bill Simon, John Fleming, and Stephen Quinn, Walmart’s three tenors of operations, merchandising and marketing respectively, talked about this challenge (along with multiple Walmart initiatives that are now getting quite a bit of press). In that presentation Mr. Simon lamented that it takes longer to build a store manager than it does to build a store and John Fleming cited “people, people, people” as the top three issues that keep him awake at night. Clearly, obtaining, training and retaining talent is a major concern at retail…and Walmart is aware.
A few years ago, when you asked someone about their ambition to go into retail, it was understood that they aspired to be a buyer for a big retailer (visions of jet-setting sourcing and buying trips dancing in their heads). These days, it’s a bit more likely that they want a position “on the vendor side” (visions of commission checks dancing in their heads). Most store-level activities involve executing mandates handed down by corporate so they simply don’t offer the kinds of challenges and creative outlets that young people want these days…unless you are a retailer like Urban Outfitters that encourages that kind of thing (and look at those sales and retention numbers!)
Clearly, there is a lot of confusion regarding the benefits and potential career trajectories within retail and the industry is not doing a good job promoting retail jobs. With so many store-to-executive suite case studies at the ready, that’s a shame.
Retailers preach about the importance of their team members, but few retailers actively support this proposition. For most, retail jobs are seen as entry-level, low-paying positions…a place to start to build a resume but not a place to aspire to.
It’s up to retailers to change this perception, if they really want to. This can be done by the way employees are treated and empowered and by having clear career paths.
I agree with what Susan Rider posted. When Lee Scott talks about promoting the attractiveness of retail jobs, my guess is that, in Mazur Plan lingo, he’s talking about all four functions: merchandising, publicity, store management, and accounting & control. And my guess is that when most people think of getting a job in the retail sector, they think about selling, which is just one subcategory within one of the Mazur Plan categories. This narrow focus also seems reflected in our discussion prompt. Most of the employment issues that constituted a big headache for Mr. Scott concerned the sales force, not the people, for instance, who maintain Wal-Mart’s astounding purchasing and distribution system.
Retail sales work is different from other sorts of work. Chief among the distinctions, doing it well requires skills in interacting with a broad range of personalities. In the back office, you pretty much know who you’ll be dealing with day-to-day, but on the floor, you’ve much less certainty about who will be walking into your sales area and what personality baggage they carry. Because of the high turnover among retail salespeople, I’m talking, of course, about the new employees who walk into your sales area. The customers who come in are something else again.
I’m a fan of realistic job previews and team building. To compete effectively against other industries for finding and keeping top talent in retailing, just a couple of the often-overlooked specifics include recruiting salespeople from your base of frequent customers and taking the time to thoroughly teach new employees how the store team works. Consistent with what Max Goldberg posted, I’ve found the second of these two to be valuable in opening up the minds of retail employees to the possibilities for becoming retailing professionals.
I understand that fewer than 1% of the graduates of top business schools go into retail (don’t remember where I read that.) If true, I would surmise that it is at least partially due to the perceived lack of intellectual challenge in the enterprise. Here we have a $14 trillion dollar world industry with VERY little understanding of shopper behavior in the store. I’m quite certain there has been a great deal more study of staff productivity than shopper productivity–the latter having a far greater impact on profits than the former.
A major problem is the tacit understanding that sales data and shopper segmentations tell you all that you need to know. With inundation with such data, it is easy to be like the person with only a hammer as a tool, and for whom every problem/question is a nail.
However, there does seem to be a global growth in interest, with “shopper insights” getting downright trendy. And there are certainly a few strong academic programs, worldwide.
The retail industry certainly needs to promote careers in retailing. Many of the best and brightness college students view retailing as offering low pay, long working hours, and unexciting careers. Their parents have a misconception that students who take entry level positions upon graduation with be working as sales associates, not management trainees and managers. It mystifies me why their professional parents feel Wal-Mart is run by sales associates. Students, and their parents, do not appreciate that retailers operate global, high tech, sophisticated businesses and that successful people working in the industry have considerable responsibilities and financial rewards at a very young age.
With the increasing sophistication of retail operations, the industry has a great need for a new generation of retail leaders and the industry is certainly not doing enough to attract the talent that will be needed to compete effectively. An important goal of the Miller Center for Retailing Education and Research at the University of Florida is to stimulate interest in retailing careers and prepare students for entry level management trainee positions.
I teach a Retail Management course at Towson University. At the beginning I ask the juniors and seniors how many work in retail while they are students. Typically, 80% raise their hand. Then I ask how many are interested in retail careers. Only two or three hands remain.
Later in the course, after they learn about the career opportunities in retail and the challenges of supply chain management, e-commerce, planning, business intelligence, and store operations, I ask them again. This time typically more than 50% say they would consider retail careers.
The lesson? Retailers do a horrible job talking to their college-attending employees about career opportunities.
I’ve liked working in retail but the dollars just are not there. The only way you can make six figures is to be a manager of a high volume store. For most people, it’s just not worth getting out of bed for.
Perhaps if I had heard of Wegmans, Publix or Trader Joe’s when I was younger, I wouldn’t have minded starting out in retail. But retail is hard work and little pay. I used to be an assistant manager for Woolworth’s when I got out of college for a short period of time. It seemed I was just a step ahead of being on Food Stamps. I had to opt-in to a corporate level job in order to earn a decent living.
If we’ve been around long enough and are honest, we might admit that retail’s position as a great career choice started eroding as more and more selling establishments felt they had to be open at any and all hours. Being open for business seven days a week and for twelve (or more) hours a day came to be accepted by many as a competitive necessity and was in fact a requirement in a number of newly-built malls.
But this creates almost constant staffing and training challenges and tends to stretch thin key sales, support and management employees. Much more so that the historic and well known “lowish pay” issues, the uncertainty of ever changing schedules, the emergency call-ins, and the strange hours make it especially hard for parents with young children to work in and to develop a lifelong career in this environment.
In many respects, as retail management became less family-friendly employment it lost its lustre as a great career choice. As we all know, retail can be fun and rewarding. But promoting it as a genuinely fabulous career choice will be tough without addressing many of the underlying social issues and the impacts on employee households.
Retail jobs such as bagging, stocking, and clerking are well known. Retail careers are not at all well known. Business students at colleges and universities do NOT consider retail careers without some time of stimulus or intervention.
Today’s career positions in retail require sophisticated skills. Students with those skills need persuasion to consider retail careers. The industry needs to make a concerted effort in this area.
On Mr. Scott’s watch Walmart did invest in talent development by supporting undergraduate retail science programs at University of Arkansas, University of Arizona and elsewhere. Most of the students attracted to those programs visualize careers as fashion buyers, but the largest need (and a fine career opportunity) lies in store management. The job demands multi-faceted genius–a rare trait in the applicant pool.
I’ve attended more than one presentation at the U of A by retail HR executives who tried to open students’ eyes to the store management track. While the need is great, savvy college students recognize the downside all too well: Stores are removed from headquarters, so the career track typically means starting as a trainee in a small community and working one’s way up the ladder to manager, district manager and maybe regional manager.
Interestingly, the recruiters spend less energy recruiting at the business schools. MBA types are already focused on the glamor tracks like finance and marketing. In my opinion, retailers would do better to support retail management programs and recruitment at the nation’s community and state colleges, where the talent pool is more likely to stay local after graduation.
Let’s look at the numbers. In the average retail operation, fewer than 10% of the employees are salaried; meaning really career focused with a true chance for advancement and an ability to make a difference in the the organization.
Of this 10%, 80% are store-level managers who have all of the daily problems and pain but in most cases, no power to really change anything. Why would anyone want to make a career in that kind of environment? The money isn’t that great for the smart ones to put up with the pain.
For hourly frontline workers, most retailers talk about how important they are but the first thing they looked at cutting when the economy slowed down was the same most important asset. Who in their right mind goes about cutting their most important asset when things get tough?
Let’s look at one other item. Government talks about increasing the hourly wage. What groups were the first to fight the movement? Retail and Restaurant. What is the message that sends to the frontline worker?
Retail lost it way in attracting the young associate to Burger King and McDonald’s years ago. Retail got the image of not being cool. If you don’t get them when they first join the workforce, what makes you think they will come to you latter on?
Now, retail is almost viewed as the last resort for employment. The industry should and could do better. As the business has become more complex, we need to attract more of the college educated as well.
As the retail competition increases, there is some awareness that future growth will depend on improved development and recruiting. Retail today requires a wide range of skilled employees from technical areas for operations and logistics to marketing and merchandising, as well as solid financial training–and strong interpersonal skills at every level. As senior managers retire, finding the specialists and generalists will be a challenge.
There are Universities working to develop these programs. Western Michigan University has a great program in Retail Marketing with strong industry participation.
Lee Scott’s comments are fascinating because his employee compensation policies at store level had the effect of putting a bulls-eye on Walmart for so long. There is a need to improve the quality of store-level, customer-facing retail jobs in order to keep the industry dynamic and innovative. In the race to the bottom, however, far too many retailers have paid little heed to the people on the front lines.
I certainly respect all that Walmart has accomplished for consumers over the years, but it’s a bit curious for Lee Scott to be bemoaning the state of retailing jobs after leading a company whose strategy it is to drive every last penny possible out of costs, regardless of the impact on its employees.
Most retail positions are one step up from cab driver. There’s a great reason most retailers’ staff turnover is over 100%, and it’s not because the staff have “good jobs.” One of the few ways small retailers can compete against the big guys: they can pay cash to their folks. If that was eliminated, retail staff turnover would be even higher. Of course, no industry has worse jobs and higher turnover than restaurants. Restaurant folks are suburban versions of migrant laborers, paid to do a job for a few weeks, then movin’ on. Yes, there are some exceptions, but come on, isn’t that like expecting a lottery ticket to make you rich?
Horticulture students at our 2 year technical college are very interested in retail employment but is retail really interested in them? Students hear stories which make them consider retail sales work for seasonal summer jobs only.
The rumour is that retail is a ‘dead end’ that doesn’t pay particularly well, provides few opportunities for advancement with limited benefits–especially for independent garden retailers. Students complain they are not given any real responsibility and don’t always get to use their training and plant knowledge to assist customers. More often than not they get stuck behind a cash register or unloading trucks day in day out. They are sometimes promised summer long work and laid off after the busy season.
Chains such as Lowe’s have excellent websites with great information on careers and opportunities for advancement within the company around the world. Combine this with decent wages, year round employment, health and retirement benefits, clear management training pathways and you’ll see why my students most often choose these chains for retail employment. I have students happily and successfully employed at both independent and chain retailers.
Someone here made the comment that retailers do a poor job of promoting themselves as career destinations, even to those employees who are attending college simultaneously. I am not so sure about that, but I do think that retailers do a poor job of promoting themselves on college campi. The mistake they often make is not understanding their target audience. I offer several examples: the Haslam School of Business at University of Tennessee; the Walton School of Business at the University of Arkansas; Fisher Hall Dormitory at Princeton; J.C. Penney Professor of Marketing, BYU; Kmart Professor of Marketing, West Virginia University. These represent respectively (Pilot Travel Centers, Wal-Mart, Gap Stores, Penney’s, Kmart), and are all large and successful retailers.
The salient issue is that all of these represent huge sums of funding given to business schools, none of which have an actual “retailing” program. These are just a few examples amongst the many. Actual retailing programs exist at many large and medium-sized universities, where retailing careers are the “first choice” and not a “fall back” choice as characterized by another poster here. (There are exceptions, including Babson College and Florida, which do a great job of promoting retailing as a career, even though they have no actual retailing major, but these are few and far between.)
Yet these large retailers choose to support schools and colleges where retailing as a profession is seen as second-tier. Retailers would get a much greater bang for their buck, while doing much to promote retailing as a career if they would support those colleges and schools with actual retailing programs and majors including (but not limited to): Michigan State, South Carolina, Ohio State, Tennessee, Arizona, Texas Tech, N.C. State, Purdue and others.
In my opinion, retailers throwing money at business schools which have no retailing programs is like Wal-Mart throwing (advertising) money at Macy’s customers. Macy’s will always be the first choice, then Target and “maybe” Wal-mart if there is nothing else around.