CONTEXT

In $2019$ Wal$-$Mart employed over $1\mathrm{.}7$ million employees in the U$.$S$.$ and, in its annual report, recorded an employee turnover rate of about sixty percent. Although Wal$-$Mart has since made some efforts to improve employee retention, the situation remains substantially unchanged and, more importantly, the underlying principle is still very pertinent. In fact, Amazon actually pays employees who have, $($often legitimate$)$ grievances to quit.

THE CASE

Given the vast number of employees, enormous expense in terms of rehiring and training is to be expected. For purposes of this exercise we presume that employee training pay is above the federal minimum and, more or less the average of state minimums, or about $$6\mathrm{.}50.$ We estimate that training time is three and half work weeks of thirty$-$six and half hours. Since Wal$-$Mart has about $1\mathrm{.}7$ million employees, a $60\%$ turnover means hiring and training about a million new people every year. In addition to the cost of the trainee we must add the cost of those doing the training. This would make annual training costs alone at Wal$-$Mart over a billion and a half dollars a year

CALCULATION

$\backslash$table$[[$THE HIGH COST OF LOW EMPLOYEE RETENTION: Wal$-$Mart in the United States$*],[$Category$,$Imputation basis,value,$],[$Total employees,Wal$-$Mart $2006$annual report $($rounded$),1,700,000,],[$Turnover rate,Wal$-$Mart $2006$annual report $($rounded$),60\%,],[$Total turnover,Equals new employees each year,$1,020,000,],[$Weekly per new employee,time,$ values$],[$Imputed hourly rate,Imputed starting base pay,per hour,$$6\mathrm{.}50$