Learn why top retailers keep the Work Opportunity Tax Credit in stock
Retail is a trade as old as time. People have always needed goods, and retailers have always provided them. Simple, right?
Well…not so much. Just ask a retailer how their business has changed in the last five years. From online shopping to social distancing to mobile payments, retail has had to adapt to many changing norms.
Through it all, they’ve also had to clear two hurdles that don’t seem to be going away any time soon:
That’s why smart retailers understand the dual value of the Work Opportunity Tax Credit (WOTC)–a federal employment tax program that can both broaden your talent pool and directly reward you for hiring certain job-seekers.
We’ve helped many retailers create lasting change to their bottom line through this program. This blog explores how in detail.
Expand your applicant pool
The WOTC rewards employers for hiring and retaining job-seekers from certain disadvantaged target groups, including:
- Veterans
- Ex-felons
- Residents of economically distressed areas
- Recipients of certain forms of government assistance
- Certain seasonal employees
- and more
Businesses who take full advantage of WOTC design their recruiting strategy to include applicants from these categories. This practice financially rewards both the business and the employee, and may also help the business fill open roles by incentivizing them to search in often-overlooked places.
Retailers have an advantage when it comes to recruiting WOTC employees. We’ve found that upwards of 35% of applicants at retail stores already qualify for WOTC–among the highest rates in any industry!
Get paid back for hiring
After WOTC-eligible employees are certified by the appropriate state workforce agency, they generate tax credits for their employer after working certain amounts of hours. The amount of credit any given WOTC employee can generate varies according to a handful of factors, but an average WOTC employee lowers their employer’s tax liability by $2150.
Depending on the volume at which your business hires, and the associated expenses of doing so, tax credits earned through WOTC employees can offset or eclipse the overall cost of recruitment and hiring.
Beyond this, reduced tax liabilities result in growth for your bottom line.
Since few industries hire at higher volumes than retail stores–especially during peak seasons–after implementing a well-oiled WOTC program, owners can expect WOTC profits to quickly outpace the unavoidable costs of recruitment and hiring.
Stronger workforces
Although some employers may hold biases against hiring WOTC-eligible employees, this should not discourage them from taking advantage of the program’s benefits. Research has shown that WOTC workers:
- Perform better than or equal to their peers
- Stay in their job as long or longer than non-WOTC employees
- Are less likely to leave their job in the first year than their peers
- Earn as much over time as their peers
- Progress through career ranks at the same pace as non-WOTC employees
- Are just as likely as non-WOTC employees to move to another job following their WOTC-eligible job (rather than unemployment)
Additionally, WOTC workers tend to come from diverse backgrounds, and bring diverse experiences to workforces. As a result, adding WOTC employees to any workforce can benefit DEI initiatives, and improve workplace cultures in a myriad of ways–including driving innovation and growth, according to Harvard Business Review.
Don’t discount WOTC
We’ve helped hundreds of businesses claim over $650M in tax credits over the last decade.
Our tools and solutions help businesses of any size claim the money they deserve. If you’re ready to get rewarded for the hiring you’re already doing, partnering with us is the right choice. We make claiming tax credits simple.