Why Retailers Are Taking the Lead on Skills-First

Best Buy employees take six-to-12-month leaves from their current jobs to rotate through other departments and develop new skills. At Walmart associates undergo training to earn commercial driver’s licenses and become members of the retailer’s private fleet, where they can make up to $110,000 in their first year. In the U.K., Marks & Spencer has been investing in apprenticeships to improve the digital skills of its workers. 

Retail companies are pitching upskilling and internal mobility opportunities like never before as they strive to remain competitive, improve employee retention, and advance equity at their organizations.

That was a clear message from a recent Jobs for the Future conference where LinkedIn vice president Aneesh Raman discussed the topic of skills-first hiring and workforce development with three retail industry executives, Jocelyn Caldwell, vice president, workforce strategy and organizational development at Walmart; Shana DeSmit, vice president, divisional merchandise manager, meat and seafood at Sam’s Club, a division of Walmart; and Ryan Hanson, senior director, enterprise learning, human resources at Best Buy.

“Skills is something that we really believe is the centerpiece of our talent strategy,” Ryan tells Aneesh. “It’s something that I believe enables great career growth and opens the doors of opportunity.”

Filling the skills gap

Large retailers are investing significant money in upskilling workers. Walmart, for one, is in the process of spending $1 billion on career training and development, a five-year commitment the company made in 2021. Likewise, Amazon has committed $1.2 billion to provide free education and skills training to more than 300,000 employees to help them secure high-growth jobs.

“We believe that there’s an unmatched opportunity,” Shana says, “for anyone to essentially do anything. This is a place where you can dream big and you can make it happen no matter where you start.”

And what’s good for employees proves to be good for employers — retail companies have good reasons to embrace upskilling. As the industry has transitioned to an omnichannel model, with transactions conducted across physical and digital platforms, employers have been retraining their workers to stay ahead of the game. Now AI is transforming the way many retail tasks — from price adjustments to verifying when a product has expired — are handled. 

More than 50% of all activities in retail can be automated with technology, according to McKinsey. As a result, the skills retail companies will need in the future, McKinsey says, will be different from the skills they needed in the past.  

“We’ve had to be intentional about thinking about our workforce,” Shana says. “What are the ways in which we protect ourselves from disruption?”

At the same time, retail companies consider investments made in their employees’ careers as critical to improving worker satisfaction. Jocelyn notes that associates who take advantage of Live Better U, Walmart’s 100% paid-for education benefit, are twice as likely to be promoted as those who haven’t used the benefit, and leave the company at a rate four times lower than nonparticipants.

“There is a linkage,” Jocelyn says, “between investing in our associates with programs like Live Better U, and retention.”

Upskilling creates a path for everyone

Retailers also view upskilling as critical to ensuring that people from all backgrounds have a chance to secure higher-paying jobs, the retail executives said at the conference. 

As part of an effort to develop nontraditional talent pipelines, Walmart has created learning opportunities for people looking to change industries or to return to work after taking time off for things like raising a family. For example, the company offers tech bootcamps for participants from unconventional backgrounds. 

Walmart works with OneTen — an organization focused on improving the career potential of Black Americans — and other nonprofits to identify and evaluate candidates for the bootcamps. During the bootcamps, participants have an opportunity to learn, practice, and showcase their newly acquired skills to hiring managers who are actively looking to connect with talented individuals from diverse backgrounds. 

“They want to learn how to code,” Jocelyn says, “in order to become a data scientist or a data analyst, and they’re able to enter into apprenticeships and bootcamps and develop those skills.”

Helping retail workers attain “lattice-shaped” careers

Retail companies have long been known as places where people can start at the bottom and rise through the ranks. Costco CEO Craig Jelinek

began his retailing career as a part-time food stocker at FedMart, while Walmart CEO Doug McMillon started at the company as an hourly associate unloading trucks. A whopping 75% of store and supply chain management team members at Walmart and Sam’s Club — roles that pay more than $113,000 in their first year — started their careers in hourly positions. 

Now retailers are increasingly giving their employees the tools to change career lanes, the retail executives note in their talks with Aneesh.  Thanks to retailers’ focus on skills training and internal mobility, more employees are moving laterally and pursuing lattice-shaped career paths as opposed to ladders.

“When I started in 2005, it was like you started as a store employee, you become a supervisor, a manager, a general manager, and you just move up this ladder,” Ryan tells Aneesh. Currently, “you might do this job today, but move laterally to a different part of the organization.”

The Best Buy program that allows employees to rotate through different departments, called Tidal Wave, has helped employees move into jobs that are very different from their previous positions. Ryo Hamasaki, for instance, had been working for years in product merchandising at Best Buy and was feeling stuck. After completing the Tidal Wave program, he gained the skills and confidence to move into a new role and was offered a permanent position on Best Buy’s customer and employee strategy team.

Shana’s own career path is an example of a lattice-shaped retail journey. She started out 31 years ago as a part-time hourly associate. Rather than taking a traditional route, she saw an opportunity to diversify and zigzagged between senior roles in operations, fresh merchandising, and human resources, ultimately rising to her current position.

“It’s been,” Shana says, “the transferable career built on transferable skills.”

Final thoughts

Jocelyn notes that offering upskilling and internal mobility programs to employees is one of many steps employers should take if they want to adopt a skills-first approach to hiring and employee development.

Employers should consider other initiatives including creating a skills taxonomy — a categorization and classification of the skills relevant to an organization and its industry — and rewriting job descriptions to reduce degree requirements and include the skills necessary for succeeding in a job. 

“It’s going to take a broad shift in hiring practices,” Jocelyn says. “You have to create a talent ecosystem that’s based on good quality data about your associates and about jobs.”

“At the end of the day, focusing in on skills will greatly benefit workers,” she adds. “And of course, it’s going to benefit us at Walmart and others because we will now be able to broaden our  talent pools. We’re giving people opportunity, and it makes sense for both business and individuals.”