Home Depot announced Tuesday it was investing $1 billion in its hourly workers, bringing their average starting salary to $15 an hour.
The workers will see the increase, which went into effect Feb. 6, in their paychecks this month. The increase will boost pay for all hourly workers in the U.S. and Canada.
The news marks the home improvement retail giant’s joining the ranks of other large employers that are raising their minimum wages in an ongoing nationwide shortage of front-line workers. Walmart announced last month an average hourly wage of more than $17.50. Amazon said in September that starting pay for warehouse and delivery workers will be more than $19 an hour. And Target invested $300 million in hourly wage increases last year.
The companies face a labor market with more than 11 million job openings as of December — more than 1 million of which are in retail trade roles.
In an email to employees that was shared with CNBC, Home Depot CEO Ted Decker said the investment “positions us more favorably in every market where we operate.” He said higher wages will improve the customer experience as the company attracts more high-quality workers and keep experienced staff members.
“This investment will help us attract and retain the best talent into our pipeline,” he said.
Home Depot has added more training opportunities, too, Decker said, and it promoted more than 65,000 employees in 2022 alone.
The pay raises could also help Home Depot head off a fledgling campaign to unionize its stores, which it opposes. Workers at a Home Depot in Philadelphia filed to hold a union election in September, saying that workers weren’t benefiting from Home Depot’s strong sales and that stores were understaffed. Workers at the store voted to reject the union in November.
Home Depot employs 437,000 people in the U.S. and 34,000 in Canada. The vast majority are hourly employees, the company said. The company operates 2,000 stores in the U.S. and 182 stores in Canada.