Walmart, the nation’s largest private employer, said Thursday that it was raising wages for 165,000 of its workers, as it revamps leadership roles in its stores.

The pay increases, which will affect about 11% of the company’s U.S. employees, come as Walmart is undergoing a transformation to a more digitally focused retailer and seeks to reward and retain its more skilled workers.

The starting wages for bakery and deli employees will increase to $15 an hour from $11 an hour, while pay is also being raised by $1 an hour for many employees in the company’s auto car centers.

The pay raises do not extend to all of Walmart’s huge workforce, but they will no doubt be carefully watched across the broader labor market because the giant retailer sets the bench mark for lower-wage workers.

The company also announced that it was replacing certain roles in the stores such as assistant managers and department managers with new management roles with broader responsibilities.

Pay for these new “team leader” roles will range from $18 to $21 an hour and can go up to $30 an hour, Walmart said.