Will reducing seasonal hires pose a big risk for Target?
Target plans to reduce seasonal hires and give more hours to existing employees as it navigates a tight labor market.
Many associates had been requesting additional hours, which in some cases qualifies them for health insurance. Target’s tactical shift is said to be part of a broader push to attract and retain quality workers.
Hourly employees are working an average of nearly 15 percent more than they were a year ago. Associates taking on order pickup and drive-up roles can earn an additional four to eight hours a week.
“We are offering more hours to team members who want them and continuing our important investment in training and development,” said Melissa Kremer, chief human resources officer, Target, in a statement. “When we invest in and care for our team we know that guest service improves, turnover goes down and team members can more easily build rewarding careers at Target.”
Target’s turnover has fallen to a five-year low over the last two years.
The retailer’s current store staff of about 300,000 will work five million more hours during the holiday season, costing more than $75 million of additional pay. Target plans to bring on 100,000 seasonal hires, down from more than 130,000 in each of the past two holiday seasons.
Target’s moves to support staffing requirements have included raising the minimum wage of all hourly employees to at least $15 an hour starting in July of 2020, five pandemic-recognition bonuses, the August launch of a debt-free education assistance program and additional scheduling flexibility.
Other retailers have been enhancing wages and perks to entice workers and are ramping up seasonal hires as a number of upbeat holiday forecasts have arrived. Seasonal hires, however, are expected to be harder to secure than full-time workers.
Joel Bines, global co-leader of the retail practice at AlixPartners, believes over-relying on current staff to support holiday needs risks burnout. “You will absolutely exhaust your existing workforce if you don’t prepare,” he told CNBC. “The holidays are an eight- to 12-week season.”
- Target Readies Team for Holiday with More Hours, Pay and Training – Target
- Current workers to get more hours – The Associated Press/Arkansas Online
- More hours, pay and flexibility: What Target’s holiday hiring plans say about the labor market for retailers – CNBC
- Walmart-owned Sam’s Club raises minimum wage to $15, as retailers and restaurants compete for talent – CNBC
- Macy’s, Inc. to Hire 76,000 Colleagues for the Holiday Season and Beyond – Macy’s
- Seasonal Hiring Underway at Kohl’s as Company Ramps Efforts to Support Increased Seasonal Demand – Kohl’s
- Is a labor storm developing at retail? – RetailWire
- Can 14 and 15-year-olds solve the labor shortage? – RetailWire
DISCUSSION QUESTIONS: Do you see more benefits than risks in Target’s move to hire less seasonal help and give those hours to current associates? What adjustments to seasonal hires should be made given the tight labor market and ongoing pandemic?