As the unemployment rate in retail slowly trends in the right direction, with the figure dropping from 7.3 percent in May to 6.4 percent in July, according to the U.S. Bureau of Labor Statistics (BLS), Lululemon is stepping up to fill the void in raising its minimum base pay for most store and customer service employees.
Effective Sept. 27, those who are currently employed in Lululemon stores or at its Guest Education Center (GEC) in North America, as well as individuals who are hired as of Aug. 26, will earn a new minimum of $15 or $17 per hour depending on their role and the market.
Additionally, employees will continue to be eligible for Lululemon’s team-based bonus program, potentially earning up to an additional $3 an hour on average, and up to $6 an hour, if certain store-based goals and results are achieved.
Ahead of the holiday season, Lululemon will be hiring more than 8,000 team members in North America across its stores and GEC. These roles will include full- and part-time store associates and managerial positions.
“At Lululemon, continuing to support and invest in our people is our top priority,” Celeste Burgoyne, president of the Americas and global guest innovation at Lululemon Athletica, said in a statement. She added that stores and GEC teams are the “heart of our business and are vital in helping to shape our innovative guest experience. We are thrilled to reach this important milestone, and we remain committed to attracting and building passionate teams as Lululemon continues to scale and grow.”
The pay raise comes as the minimum wage remains an ongoing talking point across the United States, where the federal minimum is $7.25 per hour. Retail has the second-largest number of open positions of any industry, as job openings have increased to a high of 10.1 million, according to an August BLS report, with some economists citing unemployment benefits as one reason for workers electing to delay a return to work.
As the job market stagnated in the latter stages of the pandemic and businesses struggled to fill open positions, the conversation got louder into the summer, sparking major retail businesses to take action to attract talent.
Amazon, which fields considerable criticism for its working conditions and its current minimum wage ($15 per hour), offered a higher financial incentive for 75,000 logistics and fulfillment employees it began hiring in May. New hires received an average starting pay of over $17 per hour, while the hourly pay of more than 500,000 current employees would rise between at least 50 cents and $3 an hour. The e-commerce giant even incentivized select new hires by granting signing bonuses of up to $1,000.
That same month, one of Lululemon’s competitors in the active space, Under Armour, may have helped push the decision when it raised its minimum hourly pay rates from $10 per hour to $15 per hour (or $15.25 Canadian dollars per hour in Canada). Taking effect on June 6, more than 8,000 part-time and full-time employees saw a pay increase. The athleticwear and footwear brand said it would implement additional measures in the form of compensation, learning and development, and a new incentive plan for hourly workers, but hasn’t since elaborated on the plans.
Tapestry also is raising its minimum wage for store employees to $15 per hour, effective Sept. 5, and will grant a one-time appreciation bonus of $500 and $1,000, respectively, to store associates and managers who do not otherwise participate in the Coach owner’s annual incentive plans.
Outside of apparel, Costco raised its minimum wage to $16 per hour earlier this year, while CVS said last month it would hike its minimum hourly wage from $11 to $15 as of July 2022. The pharmacy said it recently dropped education restrictions that kept some people from getting a job at its stores.
Lululemon isn’t just looking to make a splash in the wage conversation. The retailer states that it is working toward a goal of becoming the No. 1 place where people come to develop and grow as inclusive leaders.
With the raises, the yoga pants seller announced a new internship program, IDEA (Inclusion, Diversity, Equity & Action), which is designed as a 12-week skills and experience development program that enables employees to learn across different parts of Lululemon’s business. The program is part of Lululemon’s $5 million annual investment into the IDEA concept across the organization.
Leveraging IDEA, Lululemon has a goal to reach 40 percent racially diverse representation for its stores, and 30 percent racially diverse representation for directors, assistant store managers and above by 2023.
The company also touted some of its current perks in the announcement of the pay raise, including training and development programs, professional one-on-one coaching, vacation time and paid sick leave for eligible employees, as well as sabbatical leaves at tenure marks for all full-time employees from associate to CEO.
The brand’s health benefits program includes mental health offerings and support, while the company also offers a global gender-neutral parenthood program including paid leave of up to six months.
Lululemon also has a “Sweaty Pursuits” program that gives employees a monthly budget to take fitness and meditation classes in their local communities, alongside discounts on its products.
Additionally, the athleisure powerhouse offers eight employee-led resource groups designed to generate support for traditionally and historically underrepresented employees to connect, restore and develop, both individually and as a community.
“We remain committed to investing in our people and will continue to update our holistic benefit offerings across the business on an ongoing basis. Our rewards strategy supports our employees, attracts strong talent, and recognizes exceptional performance,” said Susan Gelinas, senior vice president of people and culture at Lululemon in a statement. “These base pay increases remain consistent with our top quartile rewards philosophy and align with our values to support and elevate our people. We’re proud to recognize their hard work, and we’re so grateful for all they have navigated over the last year and half during these unprecedented times.”
Lululemon notably supplemented employees when Covid-19 struck.
Shortly after the pandemic forced stores to shutter in March 2020, Lululemon unveiled a $2 million relief fund for its studio ambassadors that covered basic operating costs, and gave all store employees pay relief through June 1 for the scheduled hours they missed due to closures.