Dive Brief:

• Target will raise its minimum wage to $13 an hour starting in June, the company announced Thursday. The retailer said it's fulfilling a commitment to raise its hourly pay incrementally, starting with an increase to $11 per hour in 2017, followed by a bump last year to $12. The announcement is part of the company's plan to reach $15 an hour by the end of 2020.
• Melissa Kremer, Target's new CHRO, called Target employees the company's greatest asset. “They're at the heart of everything we do to fulfill our purpose of bringing guests joy,” she said. “It takes a diverse, high-performing and engaged team to create experiences that make guests feel welcome and inspired, and keep them coming back. So investing in our team members is essential to keep our business growing and thriving.”
• Wage increases strengthen the company and its workforce, Kremer said, pointing out that the $12 an hour increase helped the company meet their seasonal hiring goal ahead of schedule, which in turn brought about strong holiday retail results.

Dive Insight:

Target put the spotlight on the retail industry when it announced an hourly minimum wage increase of $11 in 2017. Employment experts viewed the increase as a way to stem the high turnover rate that plagued the industry. Since 2017, big names like Walmart and Amazon have also increased their minimum wages — though not without losses for employees. Amazon slashed bonuses for warehouse employees and Walmart abruptly shuttered 63 Sam's Clubs after its wage announcement.

Retailers are hard-pressed to compete in the current labor market, prompting many to announce pay and benefit changes to try and differentiate from competitors. Some have turned to employer branding, like H&M, and focused on new benefits like predictive scheduling and parental leave. Other companies, including Taco Bell and Disney have leaned heavily into employee development programs for their hourly employees, a group not traditionally served by education benefits, to both prepare employees for the future of work and improve retention.

Employers' hands may be forced, in some regards, as state and local governments continue to pass minimum wage increases across the country in the absence of any movement at the federal level. Maryland lawmakers recently overturned the governor's veto regarding a $15 minimum wage in the state; the first incremental jump in that state to $11 per hour will occur Jan. 1, 2020.