Target will invest up to $300 million to increase employees’ starting wages, which will now range from $15 to $24 depending on the job and local market. The mass-market retailer is also expanding access to health care benefits for workers and their families.
All Target wages previously started at $15, which was a goal first set in 2017 and achieved in 2020.
Retailers looking to add staff to their ranks in a tight job market need to further incentivize hiring and beat competition with higher pay and improved benefits. Over the past year, retailers such as Macy’s, Under Armour and Saks Off 5th raised their hourly minimum wage to $15. And similar to Target’s range, Lululemon established a new employee minimum of $15 or $17 per hour depending on their role and the market.
The Conference Board (TCB) said earlier in February that average hourly earnings rose 5.7 percent over the past 12 months. The federal unemployment rate currently stands at 4 percent, but St. Louis Federal Reserve Bank president James Bullard said he sees the rate dipping below 3 percent in 2022, which would mark the first time that has occurred since 1953.
Target’s new starting pay range will apply to hourly employees in stores, supply chain facilities and headquarters. Local market-level wages are based on industry benchmarking, local wage data and more.
These expanded offerings help advance key portions of the company’s Target Forward strategy that aim to create equity and opportunity for Target’s team, partners and communities.
“Our team is at the heart of our strategy and success, and their energy and resilience keep us at the forefront of meeting the changing needs of our guests year after year. We continuously listen to our team members to understand what’s most important to them, then use the feedback to make investments that meet their needs across different career and life stages,” said Melissa Kremer, chief human resources officer, Target in a statement. “We want all team members to be better off for working at Target, and years of investments in our culture of care, meaningful pay, expanded health care benefits and opportunities for growth have been essential to helping our team members build rewarding careers.”
Beginning in April, Target also will roll out broader, faster access to health care coverage for its employees, in addition to new and enhanced benefits.
Target estimates that approximately 20 percent of its workforce team will now be newly eligible for comprehensive health care benefits. Hourly store employees who work a minimum average of 25 hours a week will be eligible to enroll in a Target medical plan, down from the previous requirement of 30 hours per week.
The mass merchant also will reduce the waiting period for all eligible hourly employees to enroll in a Target medical plan. Depending on position, eligible associates can access comprehensive health care benefits three to nine months sooner.
Some of Target’s additional benefits include free access to “virtual” physical therapy, as well as enhanced fertility benefits and other new wellness offerings, as part of most Target medical plans. The company says employees will gain faster access to 401(k) plans.
The Minneapolis-based mass merchant has made it a point to upgrade its benefits over the past few years, especially as wages and benefits both become heated topics throughout retail.
The retailer offers a debt-free education assistance program with access to more than 40 schools and 250 business-aligned programs. Additionally, all employees have been granted access to health care via virtual doctor visits and mental health counseling, as well as online resources to support mental, emotional and physical well-being.
In 2019, Target also introduced family-focused investments such as adoption and surrogacy reimbursement and paid family leave.
Additionally, the company says it has continually invested in providing access to more stable schedules and one-on-one meetings with team leaders designed to accommodate employees desired hours.
Throughout the Covid-19 pandemic, Target has offered free backup care for all employees, as well as paid leaves, providing all U.S.-based hourly employees with two hours of pay per dose (including boosters) when they get the coronavirus vaccine. The retailer also offered its U.S.-based staff free Lyft rides to get to and from their vaccine appointments.