Target raises base wages, revealing pressures on retail to retain talent
- Big retailers are raising wages as they compete with each other to attract and retain workers, reports Quartz. Federal Reserve banks have been collecting anecdotal data showing that job-hopping is common in the current economy, with record-low unemployment and myriad job openings.
- Target just announced a minimum pay hike to $11 an hour and a second increase to $15 by 2020, says Quartz. TJ Maxx raised its minimum wage to $9 an hour and pays long-term employees $10 an hour. Costco starts at $11.50 an hour and pays workers on average $21 an hour.
- The Wall Street Journal (WSJ) reports that Target's $11 an hour increase matches minimum-wage hikes in Massachusetts and Washington and exceeds wage requirements in all other states. According to WSJ, retail hires more workers than any other U.S. industry, and competition for hourly employees is up. Citing the U.S. Bureau of Labor Statistics, WSJ says retail job openings are twice what they were in 2010.
High turnover used to be a given in retail as just the cost of doing business. Now big-box retailers are finding they must do more to attract and retain workers as the economy reaches full employment. Some leaders in the space, such as Ikea and Costco, have become powerful examples by providing comparably high wages and solid benefits.
Competition for retail workers is stiff. What can distinguish employers from one another is how each engages with its employees. Retailers, like other largely blue-collar work environments, can engage employees by communicating with them at the start of their shifts when most are arriving at work. The best vehicles might include phone apps, since few retail workers have access to computers while at work.
Training is another way to engage retail workers. Walmart offers a training program for workers on a supervisory track and another for entry-level workers, which, however, has critics wondering whether workers are benefiting from the program.
The one threat to retail workers is automation. A Cornerstone Capital Group study predicts that technological advancements will hit the retail industry the hardest, with computerization eventually claiming 3.5 million jobs. HR in this space must prepare their workforces and workflow to handle the disruptive tech coming down the line.