Target Shows-Off Employment Branding Chops in Midst of Pandemic

Target Store

Rapid changes in the US retail sector during the past few weeks have brought a host of hurdles for both retail employees and corporations. On March 20, 2020 Target became the third national-level retailer (including Amazon and Walmart) to provide significant pay raises to retail workers and offering paid time off for senior employees, who should be focusing on their health during the current COVID-19 pandemic

  • Here, we’ll dissect how increased wages is an ideal example of employer branding during these interesting times.
  • We’ll talk about current trends in layoffs, and explain how this raise will put pressure on others in the retail business.

But first, let’s take a look at the expenses involved. 

Employer Branding – Target Spends $300 Million to Provide Raises and Paid Leave

Per Forbes – Target, “which employs about 350,000 people, said it would be increasing wages by $2 an hour for all part-time and full-time employees in stores and distribution centers. The raise will be in effect at least until May 2… the raise will put a total average of $240 to $480 more in worker’s pockets.”

  • Target also plans on providing bonuses to 20,000 department managers next month, ranging from $250 to $1,500 each.
  • At a minimum, these bonuses will cost Target $5 million as a one-time expense.

From the perspective of employer branding, this intelligent (but expensive) move will not only improve employee attendance during a time of crisis, but also endear the corporation to its workers. It serves to build their confidence in their jobs and reduces the likelihood that employees will leave for other work when the pandemic passes. 

  • On a side note, the announcement creates plenty of positive press about the company.
  • It furthers their corporate image as a “socially responsible” retailer.

But perhaps the most notable direct effect will be a surge in job applications. 

Layoffs Leave Workers Adrift During & After Coronavirus Outbreak

We have no crystal ball to determine the total numbers of US layoffs that will, ultimately, be caused by COVID-19. As of March 26, 2020 recreational travel and hospitality industries have been hit the hardest by massive layoffs, while dine-in restaurants and personal services (like beauty salons) have also suffered.

We’re not sure when the thousands of jobless will be ready to return to work, nor when stay-at-home / shelter-in-place orders will be lifted. However, we can be confident the positive press and increased wages will be attractive to those folks looking for work. 

  • Target will likely receive many applications from its competitors’ stables too. 

Ultimately, this boost in employer branding will provide Target supervisors with a massive pool of experienced recruits to choose from, which is one of the goals of quality employer branding. 

But the strategic marketing move does something else too – it puts pressure on other retailers – both socially and financially. 

How Target’s Employer Branding Efforts Put a Squeeze on Competitors

Imagine you’re the CEO of a regional retailer, and your stores are in many of the same neighborhoods as Target. You’ll need to do something to retain your best employees, even if you can’t match a $2 / hour raise. 

  • Team-building events and pizza parties are not the perfect options during a pandemic, so you’ll probably come up with a combination of improvements for your staff.

Maybe they include:

  • a smaller, but meaningful raise
  • increased hours for part-time employees
  • future paid time off
  • awards or titular advancements

But all these things cost money, in an industry that’s already working on incredibly tight margins! As CEO, you may be forced to raise prices (even a little), which leads to that downward spiral of fewer sales, leading to fewer purchase orders, leading to less competitive bulk-buy prices and rebates, and so on.

  • Slim margins become slimmer. 
  • As CEO, you consider closing your smallest location.

Meanwhile, Target’s marketing department revels in the glow of their socially benevolent reputation, and Target’s Board of Directors is laughing their way to the bank. 

In summary, this article is meant to help you understand how powerful employer branding can be! It has power far beyond the type of talent you’ll attract to your job postings, or your organization’s image in the neighborhood.

Our job at Ratedly is to help you keep a finger on the pulse of employer branding. We can help you monitor all the job boards and employer review boards in real-time, to help you keep track of your business’s image among staff and recruits. Want to learn more about employer branding? Contact us now!

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