The giant home improvement chain had already forecast lower profits for the year as customers are not spending as much as they did during the pandemic, a time when the sector as a whole was booming. But, Home Depot believes the $1 billion investment to increase the hourly salary of its retail workers will strengthen its workforce and make it an even stronger competitor.
“Providing customers a compelling reason to shop at your stores requires giving them real value and good service, and that’s not possible without having motivated and empowered employees,” says Zeynep Ton, a professor at MIT Sloan School of Management in Cambridge, Massachusetts. “Any retailer that wants to win needs to make sure they attract and retain the right employees and design their jobs so they can be productive and serve their customers well. And in a tight labor market, it’s getting increasingly difficult to keep talent [if] you pay unlivable wages and [offer] few opportunities for growth and success.”