Higher wages = more customer satisfaction?

Walmart and several other retailers have made well-publicized moves to raise the starting pay of their associates. At RetailWire, the “Brain Trust” discussed the cost/benefit of these changes, not only in terms of measurable economic benefit but also in terms of morale and goodwill. To me, it’s not just about reducing turnover and training costs:

The costs of turnover are certainly measurable, as George Anderson’s article points out. Over time, Walmart and other stores will be able to gauge the higher costs of payroll vs. the lower costs of recruiting and training. Short-term, however, this is unlikely to deliver a payback.

But as an intangible benefit to service levels, employee morale and goodwill among shoppers, the higher pay scale will begin to pay dividends sooner rather than later. Consumers are well aware that higher-paying retailers like Costco, Nordstrom and The Container Store also have some of the highest customer satisfaction ratings in the business…and it’s no accident.


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