The last move of Target puts pressure on Walmart

For almost a year, the number of job openings in the United States has exceeded the number of people looking for work. This has prevented companies, at least in some markets, from filling positions.

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Even workers without a university degree, specialized training and skills unique choices, which makes it difficult to find enough employees to occupy stores, for large retailers like & nbsp;Walmart (NYSE: WMT) and Target (NYSE: TGT). "data-reactid =" 12 "> Even workers without university degrees, specialized training and unique skills have choices, making it difficult to find enough employees to build stores, a challenge for large retailers as Walmart (NYSE: WMT) and Target (NYSE: TGT).

Both companies have taken steps to become places where people want to work. These steps include providing more training, improving benefits and paying more per hour. Now, however, Target has proven itself by raising its entry-level salary to $ 2 more per hour than the $ 11 minimum wage paid by Walmart.

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Target will now pay a minimum of 13 USD per hour. Source of the image: target.

What did Target do?

Both Walmart and Target have increased entry-level base compensation on a number of occasions in recent years. Target increased its minimum hourly wage from $ 11 to $ 12 in March of last year. The retailer has announced plans to reach a minimum wage of $ 15 per hour by the end of 2020.

"Our team is Target's greatest asset, new faces to those who have been with us for many years," said Melissa Kremer, Target's Director of Human Resources, in a press release. "It takes a diverse, high-performing and engaged team to create experiences that make customers feel welcome and inspired, and inspire them to come back, so it's essential to invest in our team members so that our business continues to grow and prosper. "

It sounds good, and there is certainly some truth to it, but paying more is not just about rewarding employees and attracting new ones. It's a tactical move to stop workers from going elsewhere in a market where many have options.

It is not only a question of money

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Wages, of course, make up a major part Walmart pays a minimum wage of $ 11 an hour and the company did not release a public statement regarding the latest rival increase, but early this year CEO Doug McMillon noted that Walmart employees were "winning" , $ 55 "on average with salaries and benefits," Reuters data-reactid = "31"> Of course, salaries are an important part, but not all of the compensation. Walmart pays a minimum wage of $ 11 an hour and the company has not released a public statement on this. CEO Doug McMillon, however, said early this year that Walmart workers earned "$ 17.55 on average with salaries and benefits," Reuters reported.

"I am convinced that we have the right wage investments to get the talent we need," he said.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In parallel with salaries, Walmart offers University Degrees at $ 1 per day. This is an advantage that can not only encourage an employee to join the company, but also stay there for four years (or whatever the time required to graduate). "Data-reactid =" 33 "> In addition to salaries, Walmart has been offering college degrees a dollar a day is a benefit that can not only entice an employee to join the company. business, but also stay there for four years (or the time required by the worker to graduate).

<p class = "canvas-canvas-text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Walmart and Target compete with Amazonwhich raised its minimum hourly wage to $ 15 in October. Costco pays a minimum hourly wage of $ 15 since March. "data-reactid =" 34 "> Walmart and Target are competing with Amazonwhich raised its minimum hourly wage to $ 15 in October. Costco has been paying a minimum hourly wage of $ 15 since March.

Where are you going?

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "As long as the job market remains tense, employers will have to find ways – mainly through the pay and benefits – of attracting and retaining workers.This is a situation that should not change in the immediate future, but a major element could reduce the demand: automating. "data-reactid =" 36 "> As long as the job market remains tense, employers will have to find ways – mainly through pay and benefits – to attract and retain workers. is a situation that is not likely to change in the near future, but there is one major element that could reduce demand: automation.

Some retailers have already eliminated some payment positions using cash payment (a form of automation). And the technology already exists to automate a large number of inventory and inventory tasks currently performed by humans.

For now, Walmart and Target must continue to pay more to have enough employees to operate. However, workers should not be complacent and realize that many entry-level positions will one day be automated. It is therefore important that people in these jobs take advantage of training and education opportunities.