Some longtime Lowe's employees will see thousands of dollars docked from their annual pay starting on Saturday
- Many Lowe's sales specialists who joined the company before 2011 will likely be facing a cut to their annual pay starting on Saturday, February 1.
- Earlier this year, Lowe's sent out notices to its sales specialists - employees with a specialized knowledge of a certain department who are tasked with closing deals - announcing the cut.
- These fixed allowances were established in 2012, when then-CEO Rob Niblock did away with commissions and spiffs for sales specialists.
- Some Lowe's sales specialists told Business Insider that they are expecting to lose thousands of dollars a year thanks to the cut. A number of these employees are either planning on quitting their jobs or have already left.
- A representative for Lowe's did not return Business Insider's request for comment.
- Visit Business Insider's homepage for more stories.
On Saturday, many of the remaining longtime in-store sales specialists at Lowe's will be seeing a pay cut.
Lowe's is doing away with its "allowances," a fixed amount of cash doled out to a small group of long-term employees who previously earned spiffs, or an immediate sales bonus, and commission on sales before 2012. Lowe's did not immediately respond to Business Insider's request for comment. Business Insider reviewed a leaked document announcing the cut.
Some affected sales specialists stand to see their annual pay reduced by thousands of dollars. Some told Business Insider they feel that the cut to allowances signifies a blow against more expensive long-timers. The policy change exclusively affects employees who've been there for at least nine years and who have built up a specialty in certain departments.
In October 2019, Business Insider published a story about declining morale among Lowe's workers, based on interviews with 17 current and former Lowe's employees from 14 states. Ten of those workers spoke about the effect of the allowance's cancellation in their store. Six of those workers said they'd personally be losing their allowances. At the time, Lowe's did not comment on how many employees would be affected by the cancellation of the allowance.
Business Insider verified that each individual employee worked at Lowe's. They will be kept anonymous due to concerns about professional retaliation.
'They were pretty generous, too'
The allowances themselves represented a compromise between Lowe's and its sales specialists, and one that ended up docking pay for plenty of these specialized store workers when it was introduced in 2012.
Lowe's defines its sales specialists as employees who serve "as an expert, explaining the specifications and features of a product or service to existing or potential customers, with the goal of closing a sale." Sales specialists are assigned to a specific department, like flooring, millwork, plumbing, or appliances. For some specialists - especially those working in the lucrative appliances department, according to former Lowe's employee Patricia Wilkerson - product expertise and sales skills could translate into big bucks before 2012. Back then, sales specialists were elgible for spiffs, or an immediate sales bonus, and commission.
"You could make spiffs on each appliance," a former manager from Pennsylvania told Business Insider. "And they were pretty generous, too."
The ex-manager broke down how the payoff would work. A sales specialist might close a deal on a $2,000 "high-end refrigerator." That sales specialist would be rewarded with a spiff of around $15 to $25. According to an internal Lowe's document from February 13, 2012, about half of those spiffs and commissions were paid by the company, with the other half being fronted by the product's manufacturer.
"You would get that in your paycheck almost immediately the next week," the ex-manager said.
But despite the bump in pay, some employees pointed out the downsides to working on commission. One sales specialist in appliances, who started working at Lowe's after the retailer did away with spiffs and commissions, told Business Insider that they prefer not to feel pressured into closing a deal at all costs.
"Maybe I'd make more money on commission," the employee said. "I really don't know. But I think it's more comfortable not to."
Another employee from Louisiana said that the spiffs and commissions could spark drama among sales specialists, with colleagues accusing one another of "stealing" each others' sales.
Still, for many sales specialists, spiffs and commissions came to make up a major slice of their annual pay. A former sales specialist from Illinois told Business Insider that at one time, it "was nothing to make $80,000 a year at Lowe's." That employee ended up quitting the store recently, partially in response to the cancelled allowances.
'When Lowe's wins, we all win'
When Rob Niblock was CEO of Lowe's, the era of commissions and spiffs came to a halt. Business Insider received two copies of the 2012 announcement in which the company announced it was scrapping spiffs in favor of what Lowe's called "a more collaborative, team-based 'we' approach.'"
"Effective Saturday, February 11th, we are eliminating all SPIFFs and commissions from our compensation plans," the February 8, 2012 notice reads. "We are replacing a portion of this income with an adjustment in affected employees' pay equivalent to 50% of their 2011 earnings received from SPIFFs and commissions" for paychecks between January 28, 2011, and January 13, 2012.
Those allowances were not to be added to employees' base pay. Instead, they were to be divided by 52 weeks and paid out on a weekly basis. "This allowance will result in a dependable income, not subject to fluctuations or variability based on SPIFFs/commissions or other circumstances beyond our employees' control," the announcement read.
The announcement concluded that the changes would help make Lowe's "our customers' first choice for home improvement," noting that "when Lowe's wins, we all win."
A few days later, on February 13, former Lowe's COO Rick Damron released a few clarifications.
"I also recognize the hardship this change has put on you and your family," Damron wrote in an email to sales specialists.
Damron reiterated that employees could keep these new allowances "as long as they remain employed with a Lowe's store in an hourly position." Allowances could be lost if a specialist was promoted to a salaried role or transferred to a job in distribution, a customer service call center, or a Lowe's affiliate.
Otherwise, affected sales specialists who were employed at Lowe's as of 2011 have been entitled to that allowance in the years since.
'Give them time to find another job'
Lowe's sent notices out to sales specialists earning an allowance in 2019.
"They told all the managers that they were to tell all the people that get the allowance, to give them time to find another job if they want to," a former employee in Illinois told Business Insider. "If they need to move on."
Business Insider reviewed a brief written announcement sent to that particular sales specialist based in Illinois. The unsigned notice announced that their allowance would be "discontinued" effective February 1. That particular employee's allowance amounted to a payment of over $500 on a bi-weekly basis.
The worker has since quit Lowe's, in part because of the slash to their overall pay. They said that the allowance amounted to about 30% of their paycheck. The employee estimated that, between the cessation of spiffs and commissions in 2012 and the cancellation of allowances in 2020, their overall pay will have dropped by around $40,000 a year.
"There's only so much you can adjust your spending," the employee told Business Insider. "I don't smoke. I don't drink a lot. I don't drink soda. So where in the heck am I going to cut back?"
That employee has since quit Lowe's.
One sales specialist from Louisiana said that they'd be losing out on $300 a month starting in February. A colleague will see a cut of $1,000 a month.
"I have to reorganize all my finances because $300 a month is a lot of money," the employee said. "But [my colleague] was about to buy a house. When they told him, everything in his world crumbled."
Other employees from Tennessee, Florida, and Texas said that the nixing of the allowances will cost them from $5,000 to at least $30,000 a year.
The controversial change may affect only a handful of employees in each Lowe's location, but it reflects a wider trend in declining morale through the home improvement retailer's stores. Workers have also spoken out to Business Insider over dissatisfaction with widespread changes to the scheduling system.
Not everyone in the stores, however, is surprised with the changes, including the halt to allowances. One Lowe's manager who asked that their home state not be identified said that they found the canceled allowances to be "sad."
"But I'm a realist," the manager said. "I was surprised that it had lasted as long as it did."
That being said, the manager said that they felt that Lowe's could have softened the blow to sales specialists, phasing the cuts out differently or adding "a little bump in pay" for affected employees. The manager said that they found the brief notices announcing the cuts to sales specialists "crass" and "harsh."
"People are now going to be doing the same work for less money," the manager said. "Anytime that happens, people are going to be really upset and I can certainly understand that. If I was working in a place for years and I suddenly took a pay cut, I'd be very upset."
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