Target’s New Parental Leave Policy Shows How Heated the Competition for Retail Workers Has Become

In the race for retail workers, Target is betting that new benefits will put it ahead of the competition.

On Monday, the company announced an expanded parental leave and childcare policy that will extend to all of its 350,000 employees at its stores, distribution centers and headquarters — including full- and part-time hourly workers.

As of June 30, the Minneapolis-based company will offer up to four weeks paid time off for team members after the birth or adoption of a child, or to care for a sick family member. After rolling out a free childcare program in the company’s headquarters, it will expand the benefit to workers in stores and warehouses beginning this fall. Employees will be able to take advantage of 20 free days of in-center childcare or in-home child- and eldercare. Target will also double its reimbursement for adoption or surrogacy expenses.

“Retail workforces are unique in their mix of hourly and salaried positions, and one of our philosophies is to offer the same family-focused benefits to both hourly and salaried team members,” said Melissa Kremer, Target’s chief human resources officer, in a statement.

The company also announced in April that it would raise its minimum wage to $13 per hour beginning this month, and promised to reach $15 per hour by the end of 2020.

It’s competing with retailers like Walmart — which bumped its minimum wage up to $11 per hour in January 2018 and soon after announced that it would subsidize employees’ college degrees at a cost of $1 per day — and Amazon, which in November raised its minimum wage to an industry-leading $15 per hour, affecting more than 250,000 full-time, part-time and temporary employees, as well as more than 100,000 seasonal workers. In his latest letter to shareholders, Amazon CEO Jeff Bezos challenged the company’s rivals to match its pay and benefits.

“Do it,” he wrote. “Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone.”

Retailers and other low-wage employers are feeling the squeeze of a tight labor market this year, which has intensified the fight for talent. In April, the U.S. saw its largest gap on record between the number of job openings and the number of unemployed Americans, with the former exceeding the latter by 1.625 million.

By offering childcare, Target has homed in on a particularly rare perk: only about 3% of companies provide on-site childcare service, according to a 2018 survey of more than 3,000 companies by the Society for Human Resource Management.

Walmart also expanded its parental leave policy in January to six weeks’ paid parental leave, plus an additional 10 weeks of paid maternity leave for new moms — but its policies extend only to full-time hourly and salaried workers.

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