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Target’s plan to win over seasonal workers: $12 an hour and $500 gift cards

A job seeker talks with a Target human resources representative at a Target store in Chicago. (Nam Y. Huh/AP)

Retail giant Target is hoping to hire 120,000 seasonal workers this year, 20 percent more than it did last year -- but knows it won’t be easy.

The nation’s unemployment rate, now 3.9 percent, remains near record lows, and retailers say it has become increasingly difficult to attract new workers. As a result, Target is offering more incentives than usual to lure temporary employees to its 1,800 stores and 39 distribution centers.

Among those perks: $500 gift cards, starting pay of $12 an hour, and 20 percent discounts on certain items, including fruits, vegetables and workout clothes.

“As the marketplace becomes more competitive, the significant investment we’re making in our team sets Target apart,” Stephanie Lundquist, the company’s chief human resources officer, said in a statement.

By most measures, retailers are in for a strong holiday season. A low unemployment rate, coupled with recent tax cuts that have increased take-home pay for many Americans, have led to brisk demand for everything from groceries to big-screen TVs. Sales have climbed at a number of the country’s largest chains, including Walmart, Nordstrom and Home Depot, as Americans shop more both in stores and online.

Good news for retailers this holiday season: Americans are spending on big-ticket items

As a result, retailers are likely to need more seasonal workers than in previous years -- particularly as they try to accommodate an influx of online shoppers, analysts say.

“While e-commerce is very easy for the consumer, it’s a very labor-intensive process for retailers, especially in fulfillment centers," said Neil Saunders, managing director of reserch firm GlobalData Retail. “The challenge for retailers is going to be filling all of these posts."

Target, for example, says it is doubling the number of seasonal employees devoted to fulfilling online orders. Other companies like tend to hire more than 100,000 temporary workers each fall to meet holiday demand. (Jeffrey P. Bezos, the founder and chief executive of Amazon, owns The Washington Post.)

But Saunders says it may be harder to attract seasonal workers this year for what are typically low-wage, temporary positions.

“If people are feeling better-off -- which a lot of people are -- that could deter those workers who would traditionally enter the market temporarily to make extra money during the holidays,” he said. “This is a good thing for workers, but not for retailers."

Macy’s says it plans to hire 80,000 seasonal workers this year, roughly the same number as it did last year. Kohl’s, meanwhile, began hiring for the holidays in July, in hopes of locking in qualified workers.

“Stores will just have to figure out how to do more with less,” said Sucharita Kodali, a retail analyst for the research firm Forrester. “They may ask workers to do other duties or to work longer shifts during peak hours to accommodate demand.”

At Target, executives said they are setting aside more than $2 million this year to give $500 gift cards to one randomly selected employee at each of its 1,800 stores and 39 distribution centers. Temporary workers will also receive a 10 percent employee discount on Target purchases, and time-and-a-half holiday pay on Thanksgiving and Christmas.

Sales growth at Target reached its highest level in 13 years in the most recent quarter, as traffic to the company’s stores and website rose to “unprecedented levels.” Online sales, meanwhile, rose 41 percent as price-conscious consumers stocked up on toys, electronics and home goods.

Target’s sales growth is at a 13-year high, thanks to demand for toys and home goods

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