Jerry Stritzke: A Conversation About Store Hourly Pay and Benefits

We acknowledge that rising living costs are creating pressure across the country. Pay, wages and scheduling are important topics that we are actively working on at REI but the noise on this topic is not reflecting the full picture. In the interests of transparency, we are sharing the following, which was sent to employees by CEO Jerry Stritzke in June. In summary, we have already laid out a clear plan and we are in the process of executing it. This is a complex topic but we will, as we always do, act in the interests of our employees and members.

Jerry Stritzke: A Conversation About Store Hourly Pay and Benefits

I just shared a blog on where we are as a business and industry right now. Emerging from A-Sale, it’s a strong picture, considering the context. I want to thank you all for the teamwork and passion you show for REI and the outdoors every day.

Our retail environment fits into the overall national economic picture and political dialogue. Rising living costs, an uncertain election year and many other factors contribute. Some of the conversations—like hourly minimum wage—affect our hourly employees most, so I want to tackle that discussion as it relates to REI.

We have been working on this topic actively for several months and we have identified areas where we can make changes so that we can do more for our retail colleagues. I’m going to cut to the punch line here with some specific updates on that work.

Starting in August, we will make investments in select locations where rising living costs are having a disproportionate impact on our retail hourly employees. We will share more details in July.

In October, we will share a plan to improve the consistency of our scheduling practices, because we have had dialogue around predictability of hours for some time.

By the end of the year, I expect us to share further plans, including our pay and benefits philosophy, across hourly retail employees from 2017 onwards.

At this stage, we do also want to share that anywhere $15 is law (like in Seattle) we will comply with that legislation, but we won’t be moving to a $15 minimum hourly wage across the entire co-op.

I’m going to dig into some more context explaining the reasoning behind our approach.

Pay and wages at REI today

We are a different kind of company and so we always want to do more for our people. We measure our impact differently and being a great place to work is one of our four measures of success. That’s why our total rewards offering is already at the top of our industry and close to the best in retail.

Today, on average, our part-time employees earn 32% more per hour ($11.50 per hour on average) than current regulatory minimums, and full-time employees earn 65% more than those minimums (on average more than $14.50 per hour). And, all employees are eligible to earn additional pay via our Summit Incentive Plan, based on company performance.

We provide benefits when part-time employees achieve an average of 20 hours per week. Most retailers do so at 30 hours. These benefits—including health care, paid time off and retirement—are well above what’s typical in retail.

Our retirement contributions are very generous and unique in the retail industry. For eligible employees, we guarantee 5% of eligible earnings with an additional discretionary contribution of up to 10% more (meaning employees can get up to 15% of pay in addition without paying anything yourself).

I believe, after years in this industry, that it would be very hard to find another retail employer in our sector with our values that offers this combination. Not to mention the opportunity to be a part of a co-op community that is a force that advocates for the outdoor community and to work with others who share a love for a life lived outside.

That said, the economic trends in our country are challenging. Forces are combining to make comfortable living difficult, particularly for people working in retail in growing, expensive metropolitan areas. We recognize that reality—and the reality that you can’t live comfortably on a part-time hourly retail wage alone. We want do to do more for our people where we can, so it is good that the foundation we are building on is strong.

Balancing short- and long-term responsibilities

To thrive today and tomorrow, we must invest in our people, in our brand, in our infrastructure, in our gear and in our physical and digital retail experiences. Continuing to invest in our amazing inspired guides is right up there on the list of things we aspire to do, but to ensure the long-term viability of the co-op, we have to manage our finances without putting our business into debt.

We can’t do everything at the same time, so my job is to lead the business to be as successful as we can today and to make sure that the co-op thrives in the long-term. We need to strike that balance.

Scheduling

Beyond base pay and benefits, we have heard loud and clear that scheduling matters. Many REI employees value the flexibility a retail schedule offers, but predictability also matters a lot.

We have to be great retailers and I believe we will always maintain some flexibility. Some parts of the year (even weeks or days) are busier than others. We have to flex staffing plans up and down and we are looking closely at alternative ways to get better at predictability without losing our agility.

We’ve already made some progress, including increasing the number of sales leads and other full-time roles significantly, but it’s not enough. We believe we can do better and we will make progress on this by the fall.

Positive dialogue

Those of you who know me a little will recognize that it can be frustrating for me as the CEO of REI to acknowledge that we can’t do everything at the same time. I am sure you all feel the same way. But we have to balance what we aspire to do with what we can do.

We are already working to improve our financial position so we can do more. We are focusing in on how we can be even better operators because that is how we will fund the things we want to do.

We do welcome constructive discussion on tough topics, so I hope this perspective helps and that you will comment below. We will listen and lead with our values, while strengthening our foundations for a long and healthy future for the co-op.

Jerry

About the REI Co-op