Sam's Club is reimagining its "approach to workforce compensation" in an attempt to be more attractive to employees in an increasingly competitive retail landscape.
In what could be in effort to keep staff from jumping ship to competitor Costco, the retailer announced Tuesday that it would be raising its base pay for employees from $15 to $16 an hour.
Costco, meanwhile, pays employees a minimum of $19.50 an hour.
Sam's Club said the new plan will also accelerate pay for its nearly 100,000 frontline employees, ranging from 3% to 6% based on years of service, and create opportunities for associates to build better careers. The plan sets predictable pay increase milestones to give workers "a longer-term perspective on their financial futures."
"Until now, retail compensation has largely been about hourly wages, and it’s almost unheard of to talk about frontline associate compensation in terms of a predictable financial future — that changes for Sam's Club starting today," CEO Chris Nicholas said in a statement.
With these new compensation investments, Sam's Club says the average hourly rate for its workers is anticipated to be above $19, with the potential to earn thousands of dollars annually in bonuses.
"To be truly customer-centric, companies must first be frontline focused, and this takes courage and conviction to make big bets on people," said Zeynep Ton, co-founder and president of The Good Jobs Institute.
The retailer said compensation overhaul is part of a multi-year journey to make it the best place to work by investing in wages and benefits. Since 2019, Sam's Club has made more than a dozen unique wage investments — from starting pay increases to annual stock grants — that have benefited hourly and salaried associates across every level and area of the club. In the last five years alone, the retailer's average hourly wage has increased nearly 30%.
The new pay plan goes into effect in November.