Walmart, Target CEOs aren’t worried about hiring amid holiday rush

Florida, Miami, Walmart Store at Big Discount, Check Lines.

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Walmart employed nearly 200,000 workers in its third quarter in an effort to meet the expected high level of demand during the holiday shopping season.

Retailers from Amazon to Target have raised wages, introduced new benefits and more hours for employees amid labor shortages and high demand. The pressure to add workers has only increased as the holiday shopping season approaches, which usually begins after Thanksgiving on Black Friday and runs through January.

In September, Walmart announced a plan to hire about 150,000 new workers in US stores, most of them for permanent and full-time roles, to better prepare for the holiday season. Previously, the company said it would hire 20,000 workers for permanent jobs at its supply chain facilities to meet demand for curbside pickup and drop-off.

“It was done to meet demand,” Walmart CEO Doug McMillon said on the company’s latest third-quarter earnings call.

Bring in seasonal workers

Retailers are expected to hire between 500,000 and 665,000 seasonal workers this year, compared to 486,000 in 2020, according to the National Retail Federation. That hiring period likely moved into October, as retailers announced deals early in the holiday season and encouraged shoppers to buy sooner than later amid inventory issues and shipping delays, the NRF said.

Walmart is looking to hold on to its workforce and attract new job seekers in several ways. The company has implemented three wage increases this year, with the latest increase seeing more than 565,000 store workers earning at least a $1 raise per hour. Walmart said in September that its average hourly wage in the United States is about $16.40. Walmart also said in July that it would begin paying 100% of the cost of college tuition and books to employees.

This reflects what other retailers are doing to combat the tough job market. Amazon, for example, said in September that it would look to fill 125,000 new jobs nationwide, paying an average of $18 an hour, and in some cases offering up to $3,000 as a signing bonus. Amazon has employed more than 450,000 workers in the United States since the pandemic began.

Target took a slightly different approach, cutting back on the usual amount of seasonal hires and instead giving more hours to existing employees. While the company said it will likely continue to hire about 100,000 seasonal employees, that will be less than 130,000 in each of the past two years.

Instead, Target said it plans to have its approximately 300,000 current store employees work about 5 million additional hours during the holiday season.

“We feel really good about our staff entering the holiday season,” Target CEO Brian Cornell said on “Squawk on the Street” on Wednesday. “We are offering our existing team over 5 million additional hours, with an investment of $75 million, to make sure we invest first in our existing team, but we will also add 100,000 seasonal team members for the opportunity to start with us during the holidays, but hopefully that extends into 2022 and beyond. after him”.

Cornell said Target’s worker retention numbers are “some of the strongest in our history,” which he credits with the investments it has made in wages, benefits and safety.

NRF expects holiday sales between November and December to grow between 8.5% and 10.5% compared to 2020 to between $843.4 billion and $859 billion, a record high.

Retail sales rose 1.7% in October, as online shopping saw a 10.2% increase from a year ago, according to the Commerce Department.

The effect of stimulus on employment

McMillon said the “most obvious thing” Walmart saw in the months after government stimulus waned was around hiring.

“Going back in time when the stimulus dollars started to slip away, the employment situation changed even faster,” McMillon said on the earnings call. “We saw people come back. Within weeks, we were back on staff.”

McMillon later said on CNBC’s “Squawk on the Street” that the “gradual change” in hiring has put the company “in good shape for the holidays.”

“We’re not as worried about that as we were two months ago,” McMillon said when asked about retailers finding workers right now.

Walmart reported revenue of $140.5 billion in the third quarter, up 4.3% year over year, thanks to a 9.3% increase in comparable-store sales in the United States as more shoppers return to stores.

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