H&M, the Swedish fast-fashion retailer, suffered a major public relations crisis last week when an advertisement depicting a black child modeling a sweatshirt with the slogan “coolest monkey in the jungle” set off a wave of violent protests at its stores in South Africa. The company quickly apologized and removed the ad from all its marketing, but the fallout has not ended: Musicians The Weeknd and G-Eazy have canceled partnerships with the company, activists have called for a global boycott, and the five-year-old model, Liam Mango, and his family have reportedly moved out of their home in Stockholm over “security concerns” after his mother was harshly criticized for defending the company over the controversy.
As part of its damage-control efforts, H&M announced on Wednesday that it had hired its first global head of diversity, the Associated Press reported:
In an email to The Associated Press on Wednesday, the retailer said Global Manager for Employee Relations Annie Wu, a company veteran, would be the new global leader for diversity and inclusiveness. The retailer said on Facebook that it’s “commitment to addressing diversity and inclusiveness is genuine, therefore we have appointed a global leader, in this area, to drive our work forward.”
At Quartz, Lynsey Chutel explains why the ad touched such a nerve in South Africa, and what other global brands can learn from this controversy:
Walmart, the world’s largest private employer, announced on Thursday that it was raising its starting hourly wage from $9 to $11 per hour, introducing a more generous parental leave policy, and offering one-time cash bonuses based on length of service for its US workforce. CEO Doug McMillon revealed the changes in a note to employees:
[W]e’re raising our starting wage to $11 an hour for Walmart U.S., Sam’s Club, Supply Chain, eCommerce and Home Office hourly associates effective in February. We’re also providing a one-time bonus to hourly associates that pays a larger amount the longer you’ve been with our company. Associates that don’t benefit from the new starting wage increase are eligible for the bonus and it will range from $200 to $1,000 depending on your length of service. …
I’m also excited to tell you that we’re making an important change to benefits by expanding our paid leave policy to provide full-time hourly associates with 10 weeks of paid maternity leave and six weeks of paid parental leave. This expanded parental leave also applies to salaried associates and to parents who adopt. We will also contribute $5,000 to the cost of adoption.
McMillon cited the corporate tax cut passed by the US Congress in December as part of what prompted the company’s decision. Several other major US employers, including AT&T, Wells Fargo, and Boeing, have also announced plans to invest part of their tax savings in raises or bonuses, though most companies have said these savings will mainly be spent on debt repayment, dividends, and stock buybacks.
Walmart has announced a new partnership with two financial technology startups, Even Responsible Finance and PayActiv, that will enable its 1.5 million US employees to access wages they have earned before payday, Bloomberg reported on Wednesday. Employees will be allowed eight free uses a year of Even’s Instapay tool, available through its personal finance app. The app links to the employee’s checking or prepaid account and Walmart’s payroll system. Walmart’s Chief People Officer Jacqui Canney described the partnership as an investment in employees’ financial wellbeing, as it will help protect them from having to rely on payday loans when emergency expenses arise:
The move could address a painful reality of low-income hourly workers, whose cash flow is far from predictable. Income volatility has been increasing in recent years, according to research from the Pew Charitable Trusts, and studies from the Federal Reserve show a lack of emergency savings among many workers. The inability to weather an unexpected car repair bill or medical expense can send a low-income worker into a debt spiral, and financially stressed workers can be less engaged and not as productive.
Walmart is the world’s largest private employer, so its HR policies have a tendency to set benchmarks that other major retailers and employers of the same talent cohorts are forced by market pressure to match. Sometimes that means pushing up the real minimum wage, and sometimes it means embracing automation and raising concerns about the displacement of low-wage jobs. In this latest move, Walmart is challenging its competitors to offer their store employees more financial flexibility, using these new payroll and personal finance technologies.
Walmart, the largest private employer in the US, is testing a self-driving mechanical floor scrubber in five of its stores near its headquarters in Bentonville, Arkansas, LinkedIn managing editor Chip Cutter noted in a recent blog post—and it’s not the only automated technology the big box giant is looking into:
The machine resembles a traditional scrubber but comes equipped with similar technology used in self-driving cars: extensive cameras, sensors, algorithms and Lidar for navigational mapping. Think of it as a Roomba crossed with a Tesla. A human must first drive the device to train it on a path; it can then operate largely independently, including when a store is open to customers. If a person or object gets in its way, it momentarily pauses and adjusts course. …
Walmart has said it wants to automate tasks that are “repeatable, predictable and manual,” giving its people more time to focus on higher-value work like customer service and selling.
Many of the menial tasks involved in retail work are ripe for automation, and Walmart is by no means the only major retailer experimenting with new technologies. Lowe’s rolled out an autonomous retail service robot called “LoweBot” in the San Francisco Bay Area last year, while Amazon continues to invest heavily in its robotic workforce. Being such a massive employer, however, Walmart can affect the entire US economy with its labor market decisions, so any changes it makes are bound to attract attention. In this case, Walmart’s move highlights concerns about the impact of automation on the workforce: What happens when the country’s largest employer no longer needs so many employees?
Yet Walmart is sensitive to this concern, Adam Pasick and Karen Hao write at Quartz, and has stressed that it is not using machines to replace employees:
A tight labor market has put the squeeze on US employers of all shapes, sizes, and sectors, but retailers are having a particularly hard time attracting associates and managers for their brick-and-mortar stores. Observing that retail hiring for the holiday season has been notably slower to start up this year, Reuters explores the causes of the retail sector’s talent crunch:
Sector observers have attributed this to brick-and-mortar retailers’ retreat under pressure from online players including Amazon, and firms themselves say they have simply taken a staggered approach to hiring this year that fills gaps slowly. Macy’s said holiday hiring was “off to a great start”. But staffing companies that hire employees for the industry say the problem is deeper and is putting pressure both on the quality of staff retailers can hire and, sooner or later, wages that potential candidates will demand. …
“Where we have a problem hiring is the lower level, the seasonal or entry-level employees,” said Melissa Hassett, vice president of client delivery for ManpowerGroup Solutions. Her clients include Lowe’s Cos Inc, Staples and auto parts firm Pep Boys and she says employees are seeking more flexibility with their schedules, training and pay, which is competitive with other entry-level jobs.
The competition from e-commerce has been visible in this year’s early holiday hiring numbers, where warehouse and fulfillment roles are making up a substantially larger share of the seasonal workforce. UPS and FedEx, for instance, are adding 95,000 and 50,000 staff, respectively, for the holidays, while Amazon and other e-commerce companies have ramped up hiring. Anticipating the need for these workers, some companies began recruiting them all the way back in the spring.
Since Walmart began a push to raise wages for its legion of store employees last year, leaders at the big box chain have attributed its solid performance to the greater investment they were making in their staff. And because Walmart is such an enormous actor in the US economy, its choices have ripple effects in the retail sector. Over at Quartz, Oliver Staley argues that while some see the company’s size as being a “malign force,” that doesn’t take into account how Walmart’s choices can be also be beneficial:
The company also has used its massive buying power to eliminate waste in packaged goods and to drive down the cost of energy-efficient light bulbs, speeding their widespread adoption. Raising wages can have an even bigger impact. Walmart employs one in 10 US retail workers, and one out of every 100 US private-sector employees. Just as the company forced competitors to hold the line on wages, increasing its pay is now pressuring rivals to match it.
Walmart also raised salaries for entry-level managers in response to the Obama administration’s now-defunct overtime rule last year, but at the bottom of the pay scale, seemingly small increases, say from $10 to $11 an hour, can make a big difference in the lives of the working poor. Walmart is such a huge employer, Staley points out, that its pay practices effectively set a benchmark for the rest of the retail industry, pressuring other retail giants like Target to commit to adopting a $15 minimum wage by 2020:
Starbucks has a reputation for taking good care of its store employees (or “partners” as it likes to call them), but it has nonetheless drawn some controversy this year regarding its paid parental leave program. Under a new policy announced earlier this year, new mothers who work at the coffee chain’s corporate offices are entitled to as much as 18 weeks of leave at full pay after giving birth, while fathers and adoptive parents get 12 weeks. Store employees working more than 20 hours a week and who have been with the company more than 90 days are allowed six weeks of paid medical leave upon giving birth, while those who adopt are eligible for a six-week adoption allowance, both at 100 percent of their average weekly pay.
Even though these benefits are much better than what most hourly retail and service employees in the US enjoy, the policy raised questions about why corporate employees were entitled to so much more. In August, the Guardian’s Molly Redden highlighted the impact of this disparity on store employees, noting that Starbucks is not alone among major US companies in offering more generous parental leave benefits to their corporate employees than to their front-line staff. Now, Redden reports, a group of investors led by Zevin Asset Management is pressuring Starbucks to tell its shareholders whether this discrepancy might constitute employment discrimination:
“Paid family leave is a huge factor in how well women can stay involved in the workforce after having a baby, or how much time out they have to take in their careers,” said Pat Tomaino, Zevin’s associate director of socially responsible investing. “Women and their families benefit from equal and generous paid family leave – but companies do too.”