Target expands childcare and paid family leave benefits as retailers battle for talent

America's top retailers are trying to outmatch each other with...

Posted: Jun 11, 2019 3:39 AM
Updated: Jun 11, 2019 3:44 AM

America's top retailers are trying to outmatch each other with new employee benefits to attract workers as unemployment hovers near its lowest level in decades.

On Monday, Target announced it will strengthen its child care benefits and expand paid family leave for 350,000 part-time and full-time hourly employees across stores, distribution centers and headquarters.

Employee turnover is disruptive for retailers, which are locked in a tight battle to squeeze out sales in stores and online. So companies are stepping up pay and perks to keep existing workers and attract new ones.

Target has raised its starting wage to $13 an hour and also pledged to take it up to $15 an hour by the end of 2020. Costco and Amazon have also moved to $15 an hour. Walmart raised its minimum wage to $11 an hour last year, and CEO Doug McMillion hinted last week that Walmart will raise its minimum wage "floor" in the future. The average wage of a full time, hourly worker at Walmart is $14.26, according to the company.

"We've taken a strong position on minimum starting wages, but that's just one facet," Melissa Kremer, Target's chief HR officer, said in prepared remarks.

Starting this fall, Target workers will receive 20 days of backup child care or elder care through a partner network.

Employees will be able to bring their child to an in-network day care center for $20 a day or pay a subsidized hourly rate for in-home care.

Target's backup child care plan is similar to Best Buy's. Last year, Best Buy said its employees will receive up to 10 backup care days each year for a $10 per day co-pay through a partnership with Care.com.

Target will also shift from offering its employees two weeks of paid parental leave to a broader policy that gives employees up to four weeks paid time off annually to care for a newborn or sick family member. New moms at Target will get an additional six to eight weeks of paid maternity leave, too.

"We recognize there are many different situations" when employees need to take time off to care for family members, a spokesperson for the company said.

Target's new steps follow Walmart's move last week to expand its education benefits to high-school students.

To recruit high school students, Walmart said it will pay for free SAT prep, initial college credit courses and send them to six colleges for $1 a day once they graduate from high school. Walmart began offering $1 a day college to its workforce last year.

Walmart has also offered steadier shifts to workers and expanded paid leave benefits and training, which has brought turnover down to a five-year low.

Walmart offers up to six weeks paid parental leave for full-time hourly workers and an additional 10 weeks of paid maternity leave for new moms.

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