UPS Sweetens Pay for Some of 95,000 Holiday Season Jobs

  • Delivery giant to offer bonuses, higher wages in certain areas
  • Accurate peak season planning needed to avoid package delays

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.

UPS is finding it particularly hard to find workers in the Louisville, Kentucky, area, where its giant air hub competes for warehouse help with a growing number of shippers and online retailers. The delivery company recently started a program offering tuition and housing assistance in the area to attract employees. Another difficult area is Manchester, New Hampshire, where the unemployment rate is 2.9 percent.

“Couple that fact with the fact that the labor force is shrinking in those markets, and it definitely makes it a challenge to find talent,” said Paul Tanguay, global director of recruitment strategies at Atlanta-based UPS.

For a story on the growth in U.S. household income, click here.

Large Difference

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 troubles in the two previous holiday seasons.

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 jobs from 2012 through 2014, the company said in a statement Wednesday.

Starting Wages

Temporary package handlers will receive starting pay of $10.50 an hour in some areas, compared with the $10.10 base nationally. Tractor-trailer drivers will get as much as $30 an hour, with some variation based on location. UPS will offer incentives in as many as 80 markets this year, compared with fewer than 50 markets a couple of years ago, Tanguay said.

The level of incentives offered is “based on what kind of competition are we facing in certain kinds of jobs and what are other people doing,” UPS spokesman Dan McMackin said. The company is also recruiting retired UPS employees to return for the season.

In Louisville, home to UPS’s airline unit and a 5.2 million square-foot distribution facility, the company is encouraging people to move to the region and work at UPS by offering tuition and housing assistance. Many are expected to be part-time package handlers, who typically work three- to five-hour shifts. The employees there are expected to continue with UPS past the peak period, Tanguay said.

The company plans to provide a forecast in late October for how many packages it will handle this holiday season.

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 was little changed at $106.78 at 3:16 p.m. in New York. The shares had 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.

— With assistance by Mary Schlangenstein

    Before it's here, it's on the Bloomberg Terminal.