Target’s Approach to Holiday Labor Shortages

Target to Hire Fewer Seasonal Workers This Holiday Season

Target (TGT) is changing the way it staffs for the holidays, relying more on existing employees than seasonal workers. The 2021 holiday shopping season is expected to be a big one, but retailers are up against significant labor shortages. Target’s approach is to give its existing store workers extra hours. As it stands, the retailer has around 300,000 employees who will pick up five million additional hours. This translates to about $75 million in extra pay.

That is not to say Target will not bring on seasonal workers. The retailer has plans to hire 100,000 more workers this fall and winter. But this is about 30,000 fewer people than the retailer has hired during the past two holiday seasons.

In order to achieve its goals for the holiday season, Target launched an app for employees to pick up extra shifts and swap hours with other staffers. The app has been live since the summer.

Retailers Poised for Strong Holiday Growth

Retailers are facing logistical complications as they prepare for a big holiday season. Analysts are predicting that sales in November and December will be up at least 7% year-over-year. However, inventory shortages, shipping delays, and rising energy prices are threatening that growth forecast.

Staffing has also become a big problem for retailers, with many struggling to recruit and retain workers. That could lead to longer checkout lines, empty shelves, and messy stores, which would be dangerous for retailers’ reputations. To beef up staffing levels during the holidays, retailers like Target are giving more hours to existing workers and reducing store hours.

Target’s Long-Term Goals

Giving existing employees more hours is part of Target’s push to recruit and retain workers. In July, Target raised its minimum wage to $15 per hour and now pays for eligible employees’ college tuition. Additional hours in some instances can qualify workers for health insurance and other company benefits.

It is not clear if Target’s strategy will pay off in the current environment—it is not the only retailer offering higher starting salaries, college tuition, and other perks. Walmart (WMT) pays $15 per hour and Amazon pays $18 per hour. Both of these companies also foot the bill for employees’ college. With the holiday season coming up, retailers will have to adjust to keep operations running smoothly.

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