December 10, 2007
Even as Wal-Mart prepares to ramp up hiring at its distribution center at Tahoe Reno Industrial Center east of Sparks, the retail giant is searching for ways to reduce a high turnover rate at the facility.
A spokesman at the company’s Arkansas headquarters said the company wouldn’t comment about its employment strategies, but people who have been in close contact with the company in recent months say Wal-Mart executives are concerned about turnover rates that have topped 40 percent on an annualized basis.
The grocery distribution facility, which opened about 15 months ago, currently employs 400. In coming weeks, the company wants to hire another 200 workers.
Wages haven’t been an issue for Wal-Mart.
Applicants flooded hiring centers when the company said it would pay a base rate of $14.50 an hour and up to $18.50 for some shifts to the crew of workers that opened the distribution center.
The pay put Wal-Mart on the high end of distribution employers in the area, and managers of other warehouses grumbled that their labor costs rose as the result of Wal-Mart’s arrival in the region.
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Wages for warehouse workers experienced workers as well as newbies average $668 a week in Washoe County, says the state department of employment. Wal-Mart’s pay for workers with no experience translates into $580 a week, and the company notes that production incentives can quickly increase that figure.
In a statement last week, Wal-Mart said it expects to announce a cost-of-living increase that takes effect in February, further boosting workers’ pay. And the company says the benefits package at its distribution center is among the best in the region.
Wal-Mart also provides an excellent training program and good working conditions for its employees, said Tom Fitzgerald, the chief executive officer of Nevadaworks, which coordinates workforce development in northern Nevada.
But many of the newly hired workers apparently have decided that good pay, good training and a good working environment weren’t enough compensation for often repetitive work.
“It takes a certain kind of individual to do that work,” says John Thurman, a project manager with Nevadaworks. “It can be boring.”
Wal-Mart has been recruiting consistently since the opening of the new distribution center, wooing potential new workers from billboards and placards on the backs of city buses.
Just a few hundred yards away from the Wal-Mart distribution center, a giant distribution center for PetSmart is nearing completion, and the pet supply company itself will be looking to hire between 250 and 300 warehouse workers next year.
The pool of skilled warehouse and transportation workers appears sufficient to meet the growing demand, Fitzgerald said.
And he noted that the big players such as Wal-Mart and PetSmart won’t necessarily be drawing workers away from smaller distribution operations.
Savvy warehouse managers, he says, have learned that younger workers often value flexibility and are willing to work for less money in exchange for a less rigid work environment.
The 200 workers that Wal-Mart has begun to recruit are just the first step as the company rachets up operations in northern Nevada.
By mid-2008, the company said last week, it expects to employ 900 workers at the distribution center more than double the current workforce with even more employees coming on board when the warehouse reaches full operation in 2009.
Currently, the company said the distribution center is operating at about 70 percent of capacity.
Some 300 trucks a day move through the facility, which serves 112 Wal-Mart stores in Nevada and northern California.