Walmart Employee Turnover Up Despite Early Wage Access

Walmart debuted its early pay app three years ago, letting employees access pay instantly rather than on the usual pay cycles, but users have actually been quitting faster, Bloomberg reported.

Now the retail giant is re-assessing how to promote the program, which was beloved by employees and copied by rivals, according to Bloomberg.

“Our associates are out there in the front lines every day helping to feed and clothe America,” said Adam Stavisky, senior vice president for U.S. benefits at Walmart, per Bloomberg. “If we can have them focus more on their customers and less on some of the stresses that we all have in our lives, that’s good for our associates and, again, it’s good for our company.”

The app also helped users boost savings and forecast earnings via other tools. Employees who used early pay and the other features stayed with the company longer. Those who chose to only use the fast pay option without the other tools, however, left the company faster, Bloomberg reported.

The app has posed a dilemma for the retailer, which wanted to promote savings and budgeting methods in the app. But many employees preferred the quicker access to wages, according to Bloomberg.

The issues showcase the inherent problems with introducing new perks across a workforce of 1.5 million, Bloomberg reported. Walmart hasn’t adopted a $15 starting wage like some rivals have. Instead, it has focused on promises like college tuition for $1 a day, expanded adoption and parental leave.

Walmart evaluated its app by studying 269,000 employees hired over a seven-month period in 2018. The company found that the app was particularly popular among newer employees, with a quarter of those eligible using the app within 60 days of starting work, Bloomberg reported. Of those who checked the app less frequently, 50 percent were expected quit within the first six months. Of those who checked the app more frequently, only 30 percent were expected to quit within the same period.

On-demand pay has been an option for the finance industry, too, according to Patrick Luther, industry principal of financial services at Ceridian, who told PYMNTS it’s an improvement over living paycheck to paycheck. He said it could help people build savings funds, which paycheck-to-paycheck structures don’t allow for.