Wal-mart strategy: hiring temporary workers

The multinational retail corporations sales have been under pressure recently following the uncertain economic condition of the country. Company is taking a new shift in hiring strategy, offering a large amount of temporary open positions to ensure it doesnt get understaffed and to manage its cost.

Reuters survey of 52 stores run by the largest U.S. private employer for May showed that 27 stores were hiring only temporary, 20 were hiring a combination of regular, part-time and temp jobs, and five were not hiring at all. The survey was based on interviews with managers, sales staff and human resource department employees at the stores.

“Everybody who comes through the door I hire as a temporary associate,” said a store manager in Alaska for Reuters. “Its a company direction at the present time.” he added.

The temporary job positions have been increasing this year jumping to 10% comparing to other years 2-3%. Considering the high unemployment rate in US, many consumers are struggling and so are the retailers. This strategy adopted by Walmart could reduce costs in a time when companys profits are hurt by economy. As sales are contracting competition becomes even more fierce as discount stores and dollar stores are attracting customers. It also could be a way for the companies to preserve themselves as a potential raise in health-care costs is about to be implemented by President Barrack Obama, according to experts in the industry.

Hiring temp workers and part time workers could be a way out for companies to deal with current situation said experts. As the unemployment rate is relatively high for US those practices are successful in reducing costs and easily finding labor on a 3 or 6 month basis.

Wal-mart Stores Inc closed yesterday at $74.84 per share remaining unchanged from previous day. On a year to day basis company is gaining 8%.