Home Depot is Giving Hourly Workers a Raise Worth $1 Billion

As retailers and restaurants compete for workers, Home Depot on Tuesday said it will spend an additional $1 billion to raise the earnings of its hourly employees.

‍

During its fourth-quarter earnings report, the home improvement retailer announced the wage investment. Employees' starting wages are at least $15 an hour in every market, although no average wage was disclosed.

‍

In this month's paychecks, employees on hourly contracts will be able to see the increase, which was implemented on Feb. 6, in their paychecks. The increase is expected to increase the pay of all hourly workers in the U.S. and Canada as a result of this increase.

‍

With this move, Home Depot becomes the latest major retailer in the country to signal that the labor market is still tight - especially when it comes to low-wage hourly workers. There is still good news to report about the jobs market: the unemployment rate dropped to 3.5% in December, and nonfarm payroll growth in December was better than expected, according to the most recent data available from the Bureau of Labor Statistics.

‍

Google, Amazon, Goldman Sachs, and several other large technology companies and banks have all laid off thousands of employees over the past few months. In contrast, retail, restaurants, and the hospitality industry have largely bucked the trend - and even announced plans to hire or raise wages.

‍

Walmart, the nation's largest private employer, announced recently that its minimum wage would rise to $14 an hour for store employees and the average hourly wage in the U.S. would be more than $17.50 by early March. In preparation for its busy spring season, Chipotle Mexican Grill plans to hire 15,000 employees.

‍

There have been a number of plans made by these companies, despite the fact that industry watchers anticipate a slower increase in sales in the year ahead. A lot of companies have cited labor costs as one of the things that have been driving up their budgets. Nevertheless, they are also feeling pressure to increase their pay as prices for groceries, rent, utilities, and other essentials continue to rise.

‍

There are about 475,000 employees at Home Depot, making it one of the country's largest employers in the private sector. It has approximately 2,300 stores in the U.S., Canada, and Mexico, where the vast majority of its employees work hourly jobs. Its frontline employees, who will receive the wage increases, also work in the supply chain, customer service, and merchandising roles for the company.

‍

Ted Decker, the CEO of Home Depot, said in an email to employees that was shared with Trade Algo that the investment “positions us more favorably in every market where we operate.” In addition, higher wages will allow the company to attract and retain more experienced workers, which will improve the customer experience.

‍

“With this investment, we will be able to attract and retain the best talent for our pipeline,” he said.

‍

The company has also added more training opportunities, he pointed out, including promoting more than 65,000 employees in the year 2022 alone.