Human resource management principles and practices

Human Resource Management
Background
Wal-Mart is one of the largest employers in the world. It has 2.3 million employees globally, most of which are in the United States (Yahoo, 2017). The company gains its competitive advantage in a number of ways. It is able to offer low prices, and competes on that basis (Favaro, 2015). This has two major implications for the company. First, it needs to hire a lot of unskilled and low-skilled labor. Most Wal-Mart stores are constantly hiring, because this labor, especially when paid poorly, tends to turn over a lot. Second, with this sort of turnover, the company wants to find strategies to train workers quickly, and to find workers who are more likely to stay with the company. The entire recruiting process for a lot of the store employees needs to be streamlined, efficient and process-driven.
The other major implication of Wal-Mart's strategy is that in order to have the most efficient, effective systems in place, management has to be quite talented. Wal-Mart has long been a leading innovator in logistics, for example, because it recognized that area as one where there were opportunities for margin improvement that would allow it to offer lower prices than competitors. Wal-Mart needs brains not only in logistics, but in areas like marketing and web. As an example, the company has 4000 people working on its online and mobile properties, because Wal-Mart is pursuing Amazon in this space (Ellison, n.d.). Recruiting for managerial, tech, analytics and that sort of talent is entirely different, requiring Wal-Mart to basically run simultaneous functional HR teams for different spheres of its operation, in addition to the national-level teams that it uses in Mexico, Canada, and other major international markets.
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
Excellent HR organization
Iffy reputation at for low level jobs
Global hiring
Negative press
High visibility
Lower than average pay & benefits at low level
Leverage online presence
Poaching
Good reputation at high level
Head office location
New headquarters
Employee reviews (i.e. Glassdoor)
CEO recruitment
New recruiting avenues
Minimum wage laws
Strengths
There are several strengths that Wal-Mart currently leverages, though these tend to focus on the high end positions. A good example of excellence there is that the CEO actively recruits other top executives to the company (Halzack, 2017). Having a CEO engaged in C-suite team building of this nature means that new executives are likely to have high culture fit, even if they are external hires, thereby reducing the risks associated with external executive hiring. Direct CEO involvement in hiring might seem like something HR doesn't want, but ultimately it's better for the CEO to identify candidates based on the CEO's vision for the company's direction, to ensure a good strategic fit as well as cultural.
Another strength is that the company has a good reputation for managerial roles. Wal-Mart is consistently rated as one of the most admired companies, and one of the top-ranked in its space (Fortune, 2012). This stellar reputation means that Wal-Mart has an easier time attracting talent – people know that Wal-Mart looks good on a CV; it's an affirmation that they are an innovation leader in the field who can deliver on results, since Wal-Mart has a reputation for being a results-driven organization.
Wal-Mart needs to recruit in bulk, which means that having high visibility helps. It is the world's largest retailer, has stores everywhere, and has a large online presence. Wal-Mart is known to always have openings, so it is a place that people who need work will look for. This gives Wal-Mart the opportunity, in theory at least, to skim the cream. Even hiring for unskilled entry level positions, if the company can attract better workers, they will require less training, reach full productivity faster, turn over less, and more of them will end up in the company's leadership streams. High social media engagement in particular is believed to be an influencer of both passive and active job-hunters; Wal-Mart's relative strength in this space as a consumer brand should translate over to its employer brand (Sury, 2015).
Wal-Mart in general has a strong recruiting organization, that has proven capable of delivering the talent it needs to maintain its excellence. There are challenges in an organization this size, but there is no evidence to suggest that the human resources department at Wal-Mart cannot meet these challenges.
Weaknesses
There are several areas of weakness that end up creating challenges for Wal-Mart. First, the company has an iffy reputation for low-level jobs. While its managerial and executive roles are well-regarded, lower-level jobs are not nearly held in the same esteem. That is to say, the company's employer brand ranges a fair bit, depending on what the job is. The jobs for which it has to hire in bulk, it seems to do a good job finding the people it wants, and the company openly admits that it will not be a fit for everybody, embracing its nature rather than disowning it (Sundberg, 2017).
Wal-Mart's pay and benefits for those lower-level jobs are not great. They are in line with what most other competitors offer, with the distinct exception of Costco, but they are not great, and the company instead entices workers with the opportunity to build a long career, and with the company's core values. Walmart in general seeks to work around its weaknesses, accepting them and finding ways to spin them into a positive, and that is what it does here as well.
The head office location is viewed as a negative. Small town Arkansas is not normally associated with high quality of life, which can make it difficult to recruit top talent, especially against competitors like Amazon that offer a more favorable situation – remember that entire families have to be happy, not just the talent that the company has hired. This is especially critical as the company pivots towards e-commerce, and has to draw talent away from the west coast, Boston, New York and others. To address this weakness, Walmart is building a new headquarters, and has large offices in Silicon Valley to house much of its e-commerce operation (Wahba, 2017).
Walmart has similarly been working on its weakness in retention, in particular offering its employees credits towards university. This comes with recognition that the best people were leaving the company to pursue growth, and that the company could probably retain many of them if it addressed that growth more directly (Quinn, 2010).
Opportunities and Threats
There are several opportunities for the company to leverage. The new headquarters is one, as the company can improve its ability to recruit top managerial talent by investing in better facilities at its home base. The company has also started reaching out to new recruiting avenues, such as the Ivy League recruiting circuit, a recognition that Wal-Mart should be more aggressive in seeking out the talent where it is, rather than always seeking to attract and entice talent to find it (Boyle, 2017).
The company should also expand its hiring globally in an effort to find the best talent. Walmart leadership has stated the company's desire to be more of a tech company, and that should follow through on its recruiting, as most leading tech companies scour the world globally for talent. Walmart should adopt that approach, especially given that there are a lot of countries in the world where the company already has a retail presence. Leveraging the online and bricks-and-mortar retail presence to bring new people into the talent pipeline is a tactic that could present some opportunity for Walmart to become more attractive to more people.
There are a number of different threats. Knowing that the company already has an iffy reputation for its low-level jobs, review sites like Glassdoor are a significant threat to the efforts of the company to build the employer brand. Every negative review affects the company's score, and it can be difficult to separate out management jobs from low-level jobs, so the company will have trouble appearing as an employer of choice, unless employees at all levels are happy (O'Donnell, 2017).
Negative press can also affect the employer brand, just as social media can. This can influence the companies to which people apply, and create an impression that is hard to break. Individual store decisions can affect the company as a whole, so this threat can be countered with strict company policies from head office to which all managers must adhere – policies that can prevent incidents that result in negative press.
Minimum wage laws pose a threat to Walmart in the sense that they might increase the company's cost structure. The good news is that most competitors will be similarly-affected, but the bad news is that Costco will not, and Amazon not to the same extent. Walmart's reliance on an army of low-paid workers is a threat to its cost structure, and something that the HR department will have to consider going forward.
Of course, if the company has a good employer brand for managerial talent, that will open the door to poaching. This could also be seen as an opportunity, of course, but for company's at the top it ends up being more of a threat than anything else, and HR is tasked with maintaining a competitive HR environment.

Conclusions
In general, Walmart's human resources strategy is sound. The biggest issues are at the low level, where the company requires two million or more low-skilled workers. Maintaining the employer brand and providing people with an attractive work environment can be a challenge under those conditions.
The company's approach to its weaknesses is to find ways to work around them. It recognizes that there are some areas where the weakness must exist – it cannot simply pay everybody more with its razor-thin margins. Thus, Wal-Mart finds creative solutions to the weaknesses and threats that it faces, to at least minimize the negative impacts of them.
Walmart in general has an organized and efficient human resources organization. They are able to run a continuous recruitment cycle, are able to identify good performers, and build teams that can help it to compete in the global marketplace.

References

Boyle, M. (2017). Wal-Mart wants to break into the Ivy League recruiting circuit. Bloomberg. Retrieved October 10, 2017 from https://www.inc.com/news/articles/2010/06/wal-mart-worker-retention.html

Ellison, S. (no date). How retail giant Wal-Mart remade its global network of e-commerce labs. Innovation Leader. Retrieved October 10, 2017 from https://www.innovationleader.com/how-retail-giant-walmart-is-remaking-its-global-e-commerce-labs/

Favaro, K. (2015). Why Wal-Mart needs strategic innovation to become a great investment again. Forbes. Retrieved October 10, 2017 from https://www.forbes.com/sites/kenfavaro/2015/11/29/why-wal-mart-needs-strategic-innovation-to-become-a-great-investment-again/#6a788d654211

Fortune (2017). Most admired companies. Fortune Magazine. Retrieved October 10, 2017 from http://fortune.com/worlds-most-admired-companies/walmart/

Halzack, S. (2017). Walmart's getting innovative online – and it's working. Bloomberg. Retrieved October 10, 2017 from https://www.bloomberg.com/gadfly/articles/2017-10-10/walmart-investor-day-getting-innovative-online

O'Donnell, R. (2017). How negative employee reviews hurt your employer brand – and how to stop them. Recruiter Box. Retrieved October 10, 2017 from https://recruiterbox.com/blog/how-negative-employee-reviews-hurt-employer-brand-and-how-to-stop-them/

Quinn, M. (2010). Wal-Mart gets creative on employee retention. Inc Magazine. Retrieved October 10, 2017 from https://www.inc.com/news/articles/2010/06/wal-mart-worker-retention.html

Sundberg, J (2017) How Walmart builds employer brand at scale. Link Humans.com. Retrieved October 10, 2017 from https://linkhumans.com/podcast/walmart-employment-brand

Sury, K. (2015). We're hiring! Brand and remuneration as antecedents in social media recruitment campaign. Advanced Science Letters. Vol. 21 (4) 759-762.

Wahba, P. (2017). Walmart is building a new headquarters in Bentonville, Arkansas. Fortune. Retrieved October 10, 2017 from http://fortune.com/2017/09/15/walmart-new-headquarters-bentonville-arkansas/

Yahoo (2017) Wal-Mart. Retrieved October 10, 2017 from https://ca.finance.yahoo.com/quote/wmt?ltr=1