Craigs Investment Partners broker Greg Easton said the Big Red retailer was always known as a good employer, particularly at the lower-skilled end of the market.
''This announcement shows further the new management style. The engagement is not just with the executive but right across to the people on the ground. The Warehouse sees value in employing people longer term, rather than it being school holiday work or the back-to-work market
''Not only is the company investing in improved brands, it is investing in its people.''
The policy was expected to cost The Warehouse about $2 million to $2.5 million but the company said it expected the impact on company profits to be less, due to increased team engagement, lower team turnover, improved sales and higher productivity.
The Warehouse shares rose 9c on the announcement, Mr Easton said. Shares last traded at $4.24, up 14c on the day.
On Monday, the company announced it was introducing Sony electronic products as part of its strategy aimed at winning back market share through a $130 million store refurbishment programme.
The Warehouse had in the past struggled to secure big-name electronic brands, but the company said manufacturers were ''now taking notice'' of its turnaround plans.
Mr Easton said the market was appreciative of the fact the management team was confident and clear about its strategy and it was setting the benchmark for other electronic retailers, like Dick Smith and Harvey Norman to meet.
The Warehouse chief executive Mark Powell said the company had been working on a strategy to build capability in the retail sector, including skills-based pay, comprehensive training for all roles, improved team retention and high team engagement.
''Highly engaged teams are more motivated to serve customers well and in retail, if you don't serve the customer well you will ultimately fail. That's the competitive reality. While having an engaged team is about much more than just pay, pay is a significant factor.''
The career wage would influence more people into choosing a career with The Warehouse Group. It would also help retain, reward and recognise team members who had chosen a long-term career within the group, he said.
Unfortunately, far too often retail was seen as a second-rate choice.
''We want to change that view. Retail provides an exciting, wide-ranging and fast-paced career choice and we want to do our bit to change the false perception.''
The career wage would be introduced on August 1 and was expected to cost the group an additional $2 million to $2.5 million for each of the 2014 and 2015 financial years, Mr Powell said. For qualifying members, their pay would increase to anywhere between $18.50 and $20 per hour dependent on the role, giving those staff members an extra $50 to $100 a week.
Mr Powell acknowledged the New Zealand Living Wage campaign had played a part in the company's thinking.
''We took account of the analysis done by the Living Wage campaign, which the First Union took part in, regarding the level of career pay rates required to reasonably support a household,'' he said.
First Union retail secretary Maxine Gay said the announcement, on the eve of collective agreements with the union, was excellent news for retail workers in The Warehouse. Last year, the union and the company's workers accepted a lower wage rise than justified when the company was in a turnaround phase and the share price had dropped to record low levels, she said.
At that time, Mr Powell promised the workers and their union the company would look at significant wage increases after the turnaround had been completed.
''We are pleased to see that Mark Powell is a man of his word,'' Ms Gay said.
