Target Seeks Edge With New Compensation Strategies
The competition for employees amid a nationwide labor shortage continues as major U.S. retailers vie for talent.
As the Great Resignation continues to rattle restaurants and retailers across the country, many small and large businesses alike have turned to new tactics to give themselves an edge in the competition for workers. In January, one Arizona CEO made headlines for offering new hires $5,000 to quit; last month, Home Depot announced an accelerated hiring process and other employee perks; and Arkansas has even gone so far as to offer remote tech workers $10,000 to relocate to the state — and the list goes on.
On Monday, Target announced that it will invest up to $300 million more in its team in the coming year. Part of that figure will go towards a starting-pay boost; the Minneapolis-based retailer raised its starting pay to $15 an hour in 2017, but the new minimum will range from $15-$24 an hour, dependent on the job and the local market. The bump will apply to hourly employees in Target stores, supply chain facilities and headquarters locations.
The retailer's new approach also includes added healthcare and retirement benefits. Hourly employeees who work a minimum average of 25 hours per week will be eligible to enroll in a Target medical plan; previously the threshold was 30 hours per week. The waiting period to enroll has also been reduced by three to nine months depending on position, and access to 401(k) plans has been accelerated.
Nela Richardson, ADP's chief economist, recently spoke with Time about the tight labor market's impact on wages, saying, "It's not about the worker, it's about the other company. We can see that's very resonant, especially given that larger companies have the ability to increase wages faster to offer special bonuses and more flexibility than smaller companies. This has been a head-to-head competition." And it's one that appears might continue indefinitely.
Target Corporation was up nearly 11% as of 10:15 a.m. EST today.
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