Walmart HR Strategy: SWOT Analysis of Recruiting Practices

Background: Walmart's Workforce and Competitive Strategy

Walmart is one of the largest employers in the world, with 2.3 million employees globally, most of whom are in the United States (Yahoo, 2017). The company gains its competitive advantage in several ways, most notably through its ability to offer low prices and compete on that basis (Favaro, 2015). This strategy has two major implications for its human resources function. First, the company needs to hire a large volume of unskilled and low-skilled labor. Most Walmart stores are continuously hiring because this segment of the workforce, particularly when paid modestly, tends to turn over frequently. Second, given that level of turnover, the company needs strategies for training workers quickly and identifying candidates who are more likely to stay. The entire recruiting process for store-level employees must therefore be streamlined, efficient, and process-driven.

The other major implication of Walmart's strategy is that, in order to maintain the most efficient and effective systems, management must be highly talented. Walmart has long been a leading innovator in logistics, for example, because it recognized that area as one where margin improvements could enable lower prices than competitors. Beyond logistics, the company also requires strong talent in areas such as marketing and digital commerce. As one illustration, Walmart employs approximately 4,000 people working on its online and mobile properties as the company pursues Amazon in the e-commerce space (Ellison, n.d.). Recruiting for managerial, technology, and analytics talent is an entirely different challenge from high-volume store hiring, requiring Walmart to run simultaneous, specialized HR teams across different functional areas — in addition to national-level teams operating in Mexico, Canada, and other major international markets.

SWOT Overview

The following SWOT analysis identifies the key internal strengths and weaknesses, as well as external opportunities and threats, that shape Walmart's human resource management strategy:

Strengths

There are several strengths that Walmart currently leverages, though these tend to be most pronounced at the higher end of the job spectrum. A strong example is that the CEO actively recruits other top executives to the company (Halzack, 2017). Having a CEO engaged in C-suite team building means that new executives are likely to have high cultural fit, even when they are external hires, thereby reducing the risks typically associated with external executive appointments. Direct CEO involvement in hiring might seem like something HR would prefer to avoid, but it ultimately ensures that candidates are evaluated against the CEO's vision for the company's direction — producing better strategic and cultural alignment.

Another strength is that Walmart enjoys a strong reputation for managerial roles. The company is consistently rated as one of the most admired companies and one of the top-ranked firms in its sector (Fortune, 2012). This reputation makes it easier to attract managerial talent: prospective employees recognize that a Walmart role looks strong on a résumé, signals membership in an innovation-driven organization, and validates the ability to deliver results in a demanding, performance-oriented culture.

Walmart's need to recruit in bulk makes its high brand visibility a genuine asset. As the world's largest retailer, with stores in communities across the globe and a growing online presence, Walmart is widely known to have openings on a continuous basis. This makes it a natural destination for active job seekers, and in theory allows the company to attract a large applicant pool from which it can select stronger candidates — even for entry-level positions. Better hires at the entry level require less training, reach full productivity faster, turn over less, and are more likely to advance into leadership pipelines. High social media engagement in particular is considered an influencer of both passive and active job seekers; Walmart's relative strength as a consumer brand should translate into a stronger employer brand as well (Sury, 2015).

Walmart also benefits from a strong and capable recruiting organization overall. While the scale of the operation presents ongoing challenges, there is no substantive evidence to suggest that its human resources department cannot meet those challenges effectively.

References

Boyle, M. (2017). Wal-Mart wants to break into the Ivy League recruiting circuit. Bloomberg.

Ellison, S. (n.d.). How retail giant Wal-Mart remade its global network of e-commerce labs. Innovation Leader.

Favaro, K. (2015). Why Wal-Mart needs strategic innovation to become a great investment again. Forbes.

Fortune. (2012). Most admired companies. Fortune Magazine.

Halzack, S. (2017). Walmart's getting innovative online — and it's working. Bloomberg.

O'Donnell, R. (2017). How negative employee reviews hurt your employer brand — and how to stop them. Recruiter Box.

Quinn, M. (2010). Wal-Mart gets creative on employee retention. Inc. Magazine.

Sundberg, J. (2017). How Walmart builds employer brand at scale. Link Humans.

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

Wahba, P. (2017). Walmart is building a new headquarters in Bentonville, Arkansas. Fortune.

Yahoo Finance. (2017). Wal-Mart. Retrieved October 10, 2017.