By Michael Sasso / www.bloomberg.com / September 14th, 2016
United Parcel Service Inc. is offering bonuses and higher wages for holiday help in some parts of the U.S., as the package-delivery company plans to hire about 95,000 seasonal workers amid tighter labor markets.
The sweetened compensation by one of the largest users of temporary Christmas-time employees reflects increased competition throughout the economy for a dwindling pool of available workers. U.S. incomes rose 5.2 percent in 2015 to the highest since 2007, when the last recession began. The jobless rate fell below 5 percent this year for the first time in almost eight years.
In addition to offering more pay in some markets, Atlanta-based UPS is recruiting retired company employees to return for the season. One area that’s particularly tight is the Minneapolis-St. Paul region, UPS spokesman Dan McMackin said Wednesday. The local jobless rate of 3.5 percent in July was less than the latest national figure of 4.9 percent.
“Does that affect wages? Sure,” he said. “Demand is up across the board.”
An accurate gauge of peak season demand can make a large difference in performance for UPS. The company ended up hiring about 93,000 temporary workers last year and fared well, with few delays in delivering packages ahead of the Christmas holiday. That followed major troubles in the two previous holiday seasons.
Labor Competition
UPS primarily will add package handlers, drivers and driver helpers ahead of its busiest season this year, which starts in November and continues through January. While the positions are temporary, more than 37 percent of handlers were hired for permanent positions from 2012 through 2014, the company said in a statement Wednesday.
Temporary package handlers are seeing starting pay of $10.50 an hour in some areas, compared with the $10.10 base nationally. Truck drivers get as much as $30 an hour, with some variation based on location.
“It’s based on what kind of competition are we facing in certain kinds of jobs and what are other people doing,” McMackin said.
The company plans to provide a forecast in late October for how many packages it will handle this holiday season.
Holiday Challenges
Last-minute online orders overloaded UPS’s network in the 2013 peak season, causing some packages to be delivered late and straining the company’s relations with some retail customers. The following year it overspent to prevent similar issues, which left some employees and equipment idle.
UPS rose 0.3 percent to $107.14 at 12:24 p.m. in New York. The shares gained 11 percent this year through Tuesday.
FedEx Corp. declined to specify when it would release details of its hiring plan. The shipping company reports quarterly financial results on Sept. 20.
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