Dallas, TX -- (ReleaseWire) -- 03/03/2015 --Walmart just announced that it is raising hourly pay for its workers. Part-time employees will start at $9/hour in April 2015, and the starting rate will increase to $10/hour in February 2016. Full-time hourly rates will rise from $12 to $13/hour. The goal is to pay at least $1.75 above the federal minimum wage of $7.25/hour.

The initiative will cost Walmart $1B in this fiscal year. The company has also stated that it plans to give employees more control over their schedules, but hasn't elaborated on an exact plan.

Are these signs that Walmart is responding to the changing wage and labor market? Or have they simply answered the call for higher wages that employees and union organizers have championed? Let's explore the issues.

The Union Organization Threat

In the United States, union membership is at an all-time low since 1936. Only 6.7% of total private sector employees belonged to a union in 2013. Unions generate revenue off of dues, and dues are declining.

Walmart has faced down efforts to organize workers for years. Unions, especially SEIU, have capitalized on the growing wage inequality in America. They created the Fight for 15, which is an effort to raise pay and unionize workers (primarily in the restaurant industry). This group was also very active at Walmart locations. By raising wages, Walmart proactively took the pay issue off the table for unions (at least in the short term).

The Unemployment Impact

Wages stagnated during the Great Recession and subsequent weak recovery. During the January 2015 TDn2k Best Practices Conference, economist Joel Naroff explained that wage pressure on employers is like a dam. He predicts that the dam could break very quickly in 2015 as unemployment rates fall below 5%. As of January 2015, unemployment was at 5.7%. Some economists believe that we area already at full employment.

Check out this chart from the US Bureau of Labor Statistics. Does it bring back memories? Do you remember what it was like to recruit in 2004 – 2007? You were probably paying top dollar to recruit top talent and a sign-on bonus to boot. As the chart illustrates, we're already back to 2004 unemployment rates.

The Minimum Wage Impact

In the November 2014 election cycle, voters in Arkansas, Nebraska, Alaska, and South Dakota approved ballot initiatives to raise their state minimum wages. These initiatives won by wide margins in these traditionally red states. According to a CBS News poll, 70% of respondents back the idea of raising the minimum wage, and support for this idea tends to cross party lines.

While the federal government is hopelessly gridlocked, there are grassroots campaigns across the country to raise minimum wages. Here's a map, courtesy of the US Department of Labor, that shows the current landscape.

Rising Wages

Several states on the map just passed new minimum wage laws during the November 2014 election cycle. Many of these laws phase in a higher minimum wage over 2015 or through 2018. This doesn't account for Walmart's response to wage pressure. So what gives?

We may get a clue from the trucking industry. In 2014, several carriers increased their sign-on bonuses and driver wages went up by 7% - 13% at some major over-the-road transport companies. The reason for the pay increases? The US driver shortage and pent up wage pressure.

The War for Talent

It's estimated that 10,000 baby boomers retire every day in the US. That's a lot of talent leaving the workforce. Walmart, along with other retailers, and the restaurant, hospitality, call center, and other industries, are already feeling the shortage of qualified workers -- just like the trucking industry.

So what's an employer to do? Consider taking a holistic approach.

Monitor Wages

Keep tabs on municipal and state initiatives to raise the minimum wage. As we've seen, these tend to pass quickly and easily. Don't get caught off guard.
Monitor your competition.

Check local employment advertisements and see if anyone is advertising higher wages or sign on bonuses. This is a sure sign that the dam is breaking and that wages are increasing.

Consider creating an account in PayScale or another similar compensation aggregator to see where your pay falls in the market. PayScale aggregates data from job seekers and then applies an algorithm to eliminate questionable data. Since it's crowdsourced, PayScale data tends to be more current than annual compensation surveys.

Check your industry associations for specialized wage data information. If you're in the restaurant industry you need to participate in the People Reports Consortium of human capital data intelligence.

Value Your Employees

If you start to experience a lot of turnover, start doing exit interviews, even if they are informal conversations. Simply ask the employee the reason he or she is leaving. You may discover that the issue isn't wages, and instead that it's about schedules or a management issue. Fix underlying management issues quickly to reduce the risk of future turnover.

Are there ways that you can reward employees without increasing their base pay? Consider spot bonuses and team contests. This will reward performance and also give millennials the sense of purpose and community that resonates with them.

Listen to your employees. Walmart finally has, and their response will have a widespread impact on hourly hiring across the country.

Review Your Staffing Model

During the recession a lot of companies transitioned full-time hourly employees to part-time status to avoid layoffs. Part-time workers give companies flexibility. There are underlying issues, though, that perhaps Walmart has recognized:

Many part-time workers really want full-time roles because they simply can't get enough hours working (sometimes several) part-time jobs to make ends meet.
If wages increase, can you really afford part-time workers, or should you just hire full-time employees?

Are you flexible with your part-time scheduling requests?

Do you regularly promote part-time workers to full-time roles? This gives part-time employees a clear career path.

Recruiting

Walmart is clearly positioning itself in the job market. Their decision to raise wages will impact the talent pool that employers in the retail, restaurant, hospitality, and service industry are already fighting over. Are you ready to get in the game? Help yourself by:

Have an easy, mobile employment application process that takes less than 5 minutes for candidates to complete.
Offer that system in multiple languages.

Use high touch, local recruiting strategies

Create a mobile-friendly career page. You probably already have one for customers. Now it's time to create the same branding and user experience for candidates.

Get off paper. Your target candidates are probably working multiple jobs and don't have time to visit your location to fill out a paper application.

Use Available Resources

Wages are going up, and the war for talent is here. Don't go into battle alone. HR Virtuoso has an army of experts ready to help you.

About HR Virtuoso
HR Virtuoso was founded in 2013. Based in Dallas-Fort Worth, the company provides custom mobile recruiting software solutions for high volume hourly recruiting needs in the transportation, logistics, restaurant, hospitality, and call center industries. HR Virtuoso partners with companies to develop a short form employment application that is accessible on any mobile device. Simplicity is the key to our success: it only takes candidates minutes to apply for jobs.

About Our Founder, Liz D'Aloia
Liz D'Aloia has deep roots in the retail industry. Liz worked in a variety of legal and human resources roles for a global office supplier. She has served as a Senior Employment Counsel and as a VP of HR in the transportation, retail, and mortgage industries. Liz believes that companies with high volume hourly recruiting needs must have deep candidate pools. She developed HR Virtuoso to give employers the talent pools they need to make smart decisions and is committed to making the system affordable for companies of all sizes.