Target to Spend $300M to Increase Employee Wages and Benefits
Target on Monday said it will invest $300 million in the year ahead to increase its pay and benefits packages for employees. For example, the retailer is increasing hourly pay from $15 to between $15 and $24 for employees at stores, supply chain facilities and corporate offices. Target is also making it easier for hourly workers to qualify for health benefits by lowering the minimum requirement to receive them from an average of 30 hours per week to 25, according to a company press release. About 20 percent of its workforce will be newly eligible for such benefits. Target also will roll out broader, faster access to healthcare coverage for its hourly employees, reduce the waiting period for all eligible hourly employees to enroll in a Target medical plan, and provide additional benefits, including virtual physical therapy at no cost.
Target said the expanded offerings were created to help advance key portions of the company’s Target Forward strategy that aims to create equity and opportunity for Target’s team, partners and communities.
Total Retail's Take: Target's wage hike is the latest example of companies enticing current and potential new workers with everything from higher pay to free college tuition as Americans quit their jobs at record rates, a phenomenon that has been dubbed "The Great Resignation." In fact, according to a recent Korn Ferry survey of more than 100 major U.S. retailers, 96 percent said they're having trouble finding store employees. What's more, 88 percent of respondents said it’s difficult to find workers for distribution centers. One way retailers are working on employee retention is offering increased compensation, both for hourly and salaried employees. More than half (57 percent ) of retailers surveyed said they're considering merit increases of 3.5 percent or more, while 36 percent said they're considering increases of 4 percent or more.