UPS plans to pay its army of holiday workers more this year
The package delivery giant faces stiff competition for seasonal workers as US unemployment hovers near half-century low.
Package delivery giant United Parcel Service (UPS) on Monday said it expects to hire about 100,000 seasonal workers and pay them more than it did in the past to handle the avalanche of packages shipped in the United States between the Thanksgiving and Christmas holidays, from November 28 through December 25.
That’s about the same number of people the Atlanta-based company hired for the 2018 holiday season. UPS is also counting on automation to keep up with ongoing growth in online shopping.
Delivery rival FedEx and major retailers are expected to lay out their plans in the next few weeks.
At 3.7 percent, the unemployment rate in the US is hovering at a half-century low, and the tight job market will make it harder – and more expensive – for package-delivery companies to fill seasonal jobs.
Danelle McCusker, UPS’s head of US human resources, said the company paid an average of $10.10 per hour for seasonal workers last year. She said that this year, under a new labour contract, pay rates will range from $14 an hour up to $30 an hour, truck drivers commanding the top end of that wage scale.
“Some markets are a bit more competitive, and we will adjust” wages higher and even offer bonuses of $100 to $250, McCusker said, citing pay rates in San Diego as an example.
Other employers are likely to boost pay, too.
“Last year, there was a flirtation with $15 an hour,” said Tony Lee, a vice president at the Society for Human Resource Management. “This year, $15 an hour seems pretty solid” among nationwide employers, “which puts real pressure on the mom-and-pops, who may not be able to afford $15 an hour.”
Lee said that smaller, local employers will try to counter their inability to pay higher rates by offering more flexible schedules – something not always possible at big retail and delivery firms.
Last year on a single day in October, UPS held job fairs at 170 locations around the country to recruit seasonal workers, including package handlers and drivers. McCusker said the company is considering similar events this fall.
The volume of packages running through the UPS network roughly doubles during the holidays, compared with the rest of the year, and forecasting the right number of seasonal workers and the timing of their arrival on the job can be critical.
Two years ago, UPS underestimated a surge in early shopping right around Thanksgiving, and many shipments were delayed. The company wound up spending an extra $125m to catch up and reduce delays.
UPS says that in recent years, about one-third of people hired for its seasonal positions land full-time jobs with the company when the holidays are over.
UPS is also relying on more automation to increase package-sorting capacity. The company is opening or upgrading about 20 facilities after a similar number of new or retrofitted centres last year. It estimates that its new buildings are 35 percent more efficient than its older ones. The company is also raising the percentage of packages that can be sorted with automation, reducing the number that requires handling by workers.
FedEx hired about 50,000 seasonal workers last year. Big retailers including Amazon, Target, and Walmart also looked for tens of thousands of extra workers during the holidays. Kohl’s department stores and the Michaels arts-and-crafts chain have already launched their seasonal-hiring blitzes, in another sign of the tight labour market.