MANAGING TALENT

Tech Plus Talent at Walmart

Human resource management has an enormous impact at Walmart because it is the world's largest employer, with about $2\mathrm{.}3$ million employees. At one time, most of its employees worked in stores, but Walmart has built up an e$-$commerce business, so today, a growing share of workers are filling online orders in distribution and fulfillment centers. As Walmart increasingly competes with Amazon, it is investing more in technology and looking to contain expenses even as it increases starting pay.

Walmart is preparing to open four highly automated fulfillment centers by $2024.$ The facilities, to be located in Illinois, Indiana, Texas, and Pennsylvania, will operate with a combination of people, robots, and machine learning to fill online orders rapidly. The work processes were designed for automation, taking a $12-$step manual process to pick, pack, and ship orders and simplifying it to a four$-$step robotic process that brings items to employee stations. The company expects that the four fulfillment centers will be able to deliver $95\%$ of U$.$S$.$ customers' online purchases within one or two days. They also are expected to lower fulfillment costs and eliminate the need for workers to walk for miles each day. When the facilities are built, Walmart plans to staff each one with more than a thousand workers.

Walmart is automating more than warehouse work. It recently began using artificial intelligence to negotiate certain purchases. This work is typically done by human buyers who discuss terms such as price, payment date, shipping method, and delivery date with a seller. Ideally, the buyer develops a strong relationship with the seller that pays off in terms of quality, service, and price. But so many companies are interested in selling merchandise through Walmart that it would be too expensive for the company to hire enough buyers to build all possible relationships. The AI system is trained to identify purchases that meet acceptable sets of terms and offer a nonnegotiable contract. This enables the company to make routine purchases more efficiently and offer a wider mix of merchandise affordably. The technology changes the

human buyers' jobs by reducing their time on routine purchases and expecting them to spend more of their time on building relationships and improving service.

The AI approach could offer additional benefits, especially as systems are refined with experience. A recent study found that people interact differently when they interact with $AI$ instead of a human. In an experiment involving the purchase of concert tickets, subjects interacted with either a chatbot or a human. If they learned that another customer got the tickets for less money than they were asked to pay, they were more likely to go ahead with the purchase if the news came from the chatbot. Further investigation suggests that when a computer delivers bad news, people are less likely to be offended. A price$-$conscious company such as Walmart might find this buyer behavior helpful for deciding when to use $AI$ to negotiate with vendors.

The emphasis on technology means that the company increasingly needs technology experts on the payroll. These employees often worked remotely during the pandemic, but Walmart called them back to the office at least two days a week in $2023.$ At the same time, Walmart pursued efficiency by reducing the number of technology hubs where they work. It asked tech staff working in Austin, Texas; Carlsbad, California; and Portland, Oregon, to shift to one of the remaining hubs, including San Bruno, California, and Bentonville, Arkansas.

One reason for Walmart to rely on automation is that the competition for labor has been intense. Walmart recently raised starting pay to $$14$ per hour$-$a $17\%$ increase. This is consistent with what other retailers have been doing, but it doesn't necessarily translate into higher incomes for employees, because the average weekly hours for store employees have fallen by roughly two hours per week. Still, as retailers automate, they have not moved as aggressively as other industries to reduce their workforces. They typically are not replacing workers as fast as they leave and using technology to close the gap. Walmart also looks to The future by providing educational benefits, including a program for learning new tech related job skills, developing leadership capabilities, and taking classes toward a college degree.

Question #$1$ does the description of warehouse jobs sound better with or without the planned automation? does the description of a buyers job sound better with or without the planned automation? From the employers perspective what are the pros and cons of automation in these examples?

Question #$2$ according to the examples given, what other changes is Walmart making in its jobs? For each of these identify whether the change seems likely to improve

A$.$ Efficiency

B$.$ Employee Motivation

C$.$ Ergonomics

Or D$.$ Mental Demands