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With the holiday season approaching, retailers are already swinging into action with preparations to giddy up for the busiest time of the year. The customary prepping for the festive season has set into motion early this year, thanks to tight labor market conditions. Amid retailers striving hard to hire extra manpower, Target Corporation TGT has come up with a different set of plans for the festive season.
The retail biggie plans to provide five million more working hours to its existing store employees, which will result in an increase in pay by more than $75 million. The company will provide greater flexibility to workers in terms of choosing or swapping their shifts through a mobile scheduling app. Apart from this, the company will hire 100,000 seasonal workers to support its current team. Let’s dig deeper.
Relying on Existing Worker Strength to Tackle Festive Rush
Target’s plans to invest more in its existing workforce this festive season looks prudent as it tries to get around the issue of industry-wide worker shortages. The company will provide its current workforce the opportunity to work additional hours if they are interested. Team members can avail scheduling preferences based on their own choices. To make scheduling more convenient, Target has come up with an easy-to-use mobile scheduling app. Store employees can easily choose additional hours and switch available shifts. Workers who opt for work "on demand" can chose shifts that align with their schedules. Such options are popular among team members who are students, retirees and individuals who prefer flexibility.
Target has been working toward boosting its store staff modeling capabilities to provide consistent schedules and paychecks as well as leverage new technologies and training. Management highlighted that, on average, its hourly team members are already working nearly 15% more hours than a year ago. The company is also offering back-up training options to its team members for nearly a year to support demand in areas like Order Pickup and Drive Up. The training has helped employees to work an additional four to eight hours a week. This year, based on employee feedback, the company will provide the option of back-up training for all team members.
Throughout the holiday season, the company will continue to have dedicated front-of-store team members focused on safety and cleaning precautions. Target expects to meet the seasonal rise in demand by providing efficient same-day delivery services. Over the last two years, the company has been boosting its employee strength for store fulfillment. Target will also hire 100,000 seasonal team members at stores across the country to support its current team. Suitable seasonal workers will have the opportunity to remain with Target after the holiday season. The company’s hiring plans are comparatively smaller than previous years, as it invests in its current team for more flexible scheduling, training, pay and benefits.
Management believes that by investing and caring for its workforce, the company is able to better manage attrition and enhance customer services. In 2020, the company invested an additional $1-billion for the health and well-being of employees compared with 2019. This includes the company’s bold industry-leading move of providing a $15-starting wage for all workers. Last year, it provided five pandemic-related recognition bonuses and a number of benefits that have recently transitioned into ongoing benefits. In July 2021, the company awarded a $200 recognition bonus to all frontline hourly full-time and part-time team members across stores, distribution centers and contact centers. Per a recent announcement, its U.S.-based part-time and full-time team members will be offered a comprehensive debt-free education assistance program.
Other Retailers Ramping Up for the Holidays
The holiday season is traditionally characterized with high demand as consumers shop for gifts and themselves, making use of attractive deals and offers at this time of the year. Manpower is crucial for several big-box retailers in order to manage high consumer traffic — across digital and brick-and-mortar platforms — as well as to ensure smooth flow of merchandise and delivery services.
While Target is opting to bank on its current team along with new recruits this year, other retailers are also up and about with their hiring plans. Supermarket biggie — Walmart Inc. WMT — announced plans to appoint 20,000 new workers at more than 250 distribution centers, fulfillment centers and transportation offices. Macy's, Inc. M plans to hire 76,000 full- and part-time job employees, across stores, call centers, distribution facilities and fulfillment centers. Kohl's Corporation KSS intends to recruit nearly 90,000 seasonal workers for several roles at its stores, distribution centers and e-commerce fulfilment centers.
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We expect Target to benefit from its well-chalked plans to boost hours and pay for employees, as it gets ready to roll into the holiday season. Apart from this, the company’s well-acclaimed omni-channel services, robust product assortments, loyalty programs and efforts to enhance supply chain capabilities bode well.
Shares of this Zacks Rank #3 (Hold) company have gained 25.9% in the past six months compared with the industry’s rise of 15.5%.
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