Home Depot to Spend $1 Billion More Paying Hourly Workers

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What happenedHome Depot has announced plans to increase wages and benefits for front line hourly workers. All told, the company intends to make a $1 billion investment in hourly workers this year. It already pays a minimum of $15 an hour as a starting wage, and in many markets, starting pay is even higher.So whatHome Depot CEO Edward Decker said, “We hope to improve retention through this. That’s why we call it an investment.”Decker also hopes that increased wages will result in a better customer experience. “If we take care of our associates, they take care of the customer and everything takes care of itself,” he explained.Now Decker’s sentiments on improving the customer experience do make sense. But employers don’t tend to raise wages unless there’s data pointing to a need to do so. January’s record-low unemployment rate may have helped spur Home Depot’s decision to raise wages before employees jump ship in search of higher-paying jobs.All told, employers today face a host of challenges due to general wage growth. Overall salary increases on a national level are expected to rise 4.6% this year, according to consulting firm Willis Towers Watson. Home Depot’s decision to independently raise hourly workers’ wages may be an attempt to get ahead of a brewing problem. It may also be a response to the fact that it had to hire 200,000 workers during its last fiscal year due to turnover and seasonal demand.Now whatRising wages are a good thing for workers in one regard. And they’re an especially important thing at a time when so many Americans are raiding their savings and racking up credit card balances due to inflation.Of course, rising wages also have the potential to make the problem of inflation even worse. If wages keep growing on a broad scale, consumers will be likely to keep spending money at their current pace, thereby prolonging this period of higher living costs.But since inflation seems to be here to stay for the time being, workers who haven’t seen their wages climb in the past year should be proactive in seeking out higher pay. In some cases, a jump to another company can achieve the goal of a pay raise. Boosting skills is another important step to take for those who want to see their wages climb, whether by focusing on job-specific requirements or soft skills like time management, which apply to any jobs.Because inflation is not slowing down, it seems as though employers like Home Depot are trying to acclimate to it. But workers who don’t take steps to boost their income risk falling behind at a time when living costs seem to be going nowhere but up.Those in search of a higher-paying job should also do their best to network extensively. Not only can networking help expedite the job search process, but it can also lead to higher quality job offers.Alert: highest cash back card we’ve seen now has 0% intro APR until 2024If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee. In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes. Read our free reviewWe’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 

What happened

Home Depot has announced plans to increase wages and benefits for front line hourly workers. All told, the company intends to make a $1 billion investment in hourly workers this year. It already pays a minimum of $15 an hour as a starting wage, and in many markets, starting pay is even higher.

So what

Home Depot CEO Edward Decker said, “We hope to improve retention through this. That’s why we call it an investment.”

Decker also hopes that increased wages will result in a better customer experience. “If we take care of our associates, they take care of the customer and everything takes care of itself,” he explained.

Now Decker’s sentiments on improving the customer experience do make sense. But employers don’t tend to raise wages unless there’s data pointing to a need to do so. January’s record-low unemployment rate may have helped spur Home Depot’s decision to raise wages before employees jump ship in search of higher-paying jobs.

All told, employers today face a host of challenges due to general wage growth. Overall salary increases on a national level are expected to rise 4.6% this year, according to consulting firm Willis Towers Watson. Home Depot’s decision to independently raise hourly workers’ wages may be an attempt to get ahead of a brewing problem. It may also be a response to the fact that it had to hire 200,000 workers during its last fiscal year due to turnover and seasonal demand.

Now what

Rising wages are a good thing for workers in one regard. And they’re an especially important thing at a time when so many Americans are raiding their savings and racking up credit card balances due to inflation.

Of course, rising wages also have the potential to make the problem of inflation even worse. If wages keep growing on a broad scale, consumers will be likely to keep spending money at their current pace, thereby prolonging this period of higher living costs.

But since inflation seems to be here to stay for the time being, workers who haven’t seen their wages climb in the past year should be proactive in seeking out higher pay. In some cases, a jump to another company can achieve the goal of a pay raise. Boosting skills is another important step to take for those who want to see their wages climb, whether by focusing on job-specific requirements or soft skills like time management, which apply to any jobs.

Because inflation is not slowing down, it seems as though employers like Home Depot are trying to acclimate to it. But workers who don’t take steps to boost their income risk falling behind at a time when living costs seem to be going nowhere but up.

Those in search of a higher-paying job should also do their best to network extensively. Not only can networking help expedite the job search process, but it can also lead to higher quality job offers.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2024

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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