Sam’s Club promises more predictable pay hikes and schedules

Sam’s Club is rolling out a new compensation plan this November that it says will make work schedules and pay increases more predictable for employees. The company says it will increase the rate of hourly wages to between 3% and 6% depending on tenure and establish more predictable milestones, with the goal of retaining talent and giving associates a clearer view of their long-term career prospects.

“Until now, retail compensation has largely been about hourly wages, and it’s almost unheard of to talk about frontline associate compensation in terms of a predictable financial future—that changes for Sam’s Club starting today,” CEO Chris Nicholas wrote in a LinkedIn post. “As our associates invest their time, skills and knowledge in us, we’ve been investing in them and their families, creating a place of hope and opportunity through a multi-year journey that has the potential to transform lives.”

Sam’s Club anticipates these investments will push its average hourly wage above $19, building on a 30% increase over the past five years. The plan is set to benefit nearly 100,000 frontline employees, according to the company.

• In addition to the compensation changes, the company is promising more consistent weekly schedules, an 11% increase in the number of full-time employees, and the launch of a new platform designed to help workers navigate their pay and benefits.

Competing for workers: Retaining workers became a struggle for retailers during the pandemic, and many firms have since invested heavily in wage increases and other workplace changes to encourage employees to stick around.

As Sam’s Club pointed out in the announcement, the turnover rate for the retail industry was 60% as of 2022. However, one of its major rivals boasts a significantly lower number: Costco’s turnover rate is less than 8%, per the Economist. It also raised its entry-level wage to $18.50 in 2023.

The two membership stores’ compensation structures have been compared going back to 2006, when a Harvard Business Review study called “The High Cost of Low Wages” made the case that Costco’s higher wages and benefits helped improve employee loyalty and generate more profit per unit of labor.

That report also found that Costco’s average wage had already hit $17 per hour nearly two decades ago, while Sam’s Club was $9.86 per hour. With the new investment, its starting wage will hit $16 per hour, per CNN.