Walmart hiring, wage pressures have eased, CEO says

After pandemic-fueled higher turnover and fiercer competition for workers, Walmart CEO Doug McMillon said it’s gotten easier to hire people and get them to stick around.

“It’s more normalized,” McMillon said in an interview with CNBC’s Sara Eisen that aired Wednesday on “Squawk on the Street.” “The unusual employment market that we saw the last few years has changed. We are able to staff around the country. Our turnover’s down. We’ve got more continuity, which is helping a lot.”

As the nation’s largest private employer and largest grocer, Walmart is closely watched as a barometer of both the health of the consumer and the strength of the country’s labor market. It has about 1.6 million employees in the U.S. This spring, Walmart raised the minimum wage to $14 for store employees. Its previous minimum wage was $12 an hour. Its competitors, Target, Amazon and Best Buy, had already hiked their own minimum wages to $15 an hour.

Earlier this year, Walmart signalled a potentially cooling labor market, too. It cut the starting pay for new store employees who pick and pack online orders and stock shelves by about a dollar an hour.

The labor market has cooled according to government data, too. Job openings fell in October to their lowest level in two and a half years, the Labor Department reported. The ratio of job openings to available workers is nearly at pre-pandemic levels, with the ratio at 1.3 to 1.

McMillon said in the interview that aired Wednesday that even when gearing up for the busier holiday season, the company did minimal hiring because it was “pretty much staffed.”

During the pandemic, on the other hand, Walmart’s workforce faced a lot of change and complexity, he said. The company hired bartenders, waiters and other people who were out of work and new to retail. It also dealt with store workers who had to take leave when sick with Covid.

He said wages are still going up, but “the percentage increase won’t be as much as it was.”

“It’s more normalized as well,” he said.

Yet for U.S. consumers, the road ahead isn’t as clear. He said next year could bring tighter budgets at households, even as prices fall on some items.

Generative artificial intelligence has started to change employees’ jobs, too, McMillon said. As the company drives greater productivity with the technology, he said he expects the workforce to stay the same size, but shift to different roles.

He said he expects fewer employees in store backrooms, but more on the sales floor. As Walmart adds automation to its supply chain, he said employees will supervise rather than take on physically intensive tasks.

“That’s what we’d really like, to have people extend their careers and be able, when work is over, to be able to go coach their kids’ soccer teams instead of being tired because they lifted so much weight all day,” he said.