July 30, 2013
What Does Amazon’s Hiring Spree Mean for the Rest of Retail?
Amazon.com is hiring. A press release the company put out yesterday said it was looking to hire 5,000 new full-time workers in fulfillment centers across the U.S. Amazon claims to pay 30 percent more than traditional retail and offers benefits including healthcare, 401(k) and stock awards from the first day on the job. The stock grants, according to Amazon, have resulted in a nine percent boost to workers’ pay annually over the past five years.
"We’re hiring more than 5,000 people to join our team and help us continue to innovate and serve our customers," said Dave Clark, vice president of worldwide operations and customer service at Amazon, in a statement. "We’re focused on sustained innovation across Amazon and want to help our employees succeed — whether at Amazon or elsewhere — so we offer programs like Career Choice, where we’ll pay for up to 95% of eligible employees’ tuition regardless of whether the skills they learn are relevant to a career at Amazon."
One of the advantages Amazon touts is that new employees are joining a company that is growing. In just the past year, the e-tailing giant has opened eight fulfillment centers across the U.S. Current job openings are in centers located in Arizona, California (2), Delaware, Indiana (2), Kentucky, Pennsylvania, South Carolina (2), Tennessee (2), Texas (3) and Virginia.
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Discussion Questions
Does the wage and benefits package offered by Amazon.com make it an employer of choice in the retail industry? Will the package offered by Amazon have any effect on what other retail employers offer their workers?
Poll
It’s great to hear about hiring in any form as the economy continues to be a the center of many business decisions. I am not sure that there are too many potential employees out there working in fulfillment that are going over the compensation package with a fine tooth comb, deciding whether the offering is the right mix for them. I don’t mean that they don’t care or are unable, but rather I mean that many applicants may be making a move into the industry for the first time and the compensation will be easily differentiated by their current roles. For some, just the opportunity for a job with a firm that carries the name Amazon is enough.
I wonder what percentage of the 5,000 positions will be filled by folks making upward moves from lower paying positions versus current employees in similar roles making lateral moves for a better compensation plan.
Is the compensation package being offered by Amazon hugely different from other competitive options? If the hiring process proves overly successful, if employees pack up and move from other established fulfillment and retail opportunities, it is hard to see how it wouldn’t have an effect on other retailer’s offerings.
The key part of this story is “sustained innovation.” Many retailers talk about innovation, but they’re not making this kind of investment. Retailers who want to compete with Amazon should read this story and take a fresh look at their approach to the market. This is proof that “same old” won’t cut it any longer.
The Amazon name carries great appeal and so do some of the benefits being offered, but working in a fulfillment center is not the same as working in retail. It is far more similar to working in a warehouse, be it a grocery warehouse or any other. Traditionally, warehouse positions have paid better than those for most at retail, especially at the entry level, so I am not sure the comparison is valid.
Their fulfillment centers have not been without their issues. There have been stores with headlines such as “Amazon warehouses: literally worse than coal mines” based on an Amazon fulfillment location in Rugeley in the U.K. Another was regarding workers suffering from the heat in its Pennsylvania center.
That doesn’t mean the fact that they are hiring 5,000 workers isn’t good news for those that are getting the jobs, but does leave me wondering about the impact Amazon’s growth is having on traditional retailers.
It is certainly a step in the right direction. With so many people still out of work, and so many older professionals not able to find work, they have been forced to take lower paying jobs, and at least at Amazon they will be getting benefits, and even some stock. Hopefully, Amazon is not the type of company that practices age discrimination. I don’t think this move will have any effect on how other retail employers pay until the economy improves further.
Why wouldn’t an aspiring retail or logistics oriented person not want to work at Amazon? The benefits package, the opportunity to work for a highly successful, growing organization, and stock options all point to these jobs as a chance to do better than the typical retail job. Smart retailers in these areas should look at their highest performing employees and find ways to keep them.
Amazon can and should demand excellent customer service from these people to help keep the growth and thus the job security on track!
Comparing these jobs and their compensation package to traditional retail is a mismatch. These jobs are going to be primarily in warehouse fulfillment. Thus, the job skills will be more analogous to UPS than to R.E.M.
And the compensation package will need to be as well. Much more lucrative than traditional retail if they want to hire the right people. Apples and oranges.
Amazon is a good choice—besides all the perks. It is work in a structured environment that follows the Kaizen process—the Japanese word for “improvement,” or “change for the better.” This philosophy supports practices that focus upon continuous improvement of processes. A company that has built its business on Kaizen is Danaher. A very successful company that covers many industries.
Amazon, key priciples of improvement, good pay—this is a good place for many people to apply and make a shopper’s day a bit better.
Amazon is not hiring “retail” employees. They are hiring warehouse and delivery employees. There are different skill sets involved. For instance, there is no requirement that a retail employee have a drivers license but a delivery job would require that. In that every market only has a limited number of people willing to work, Amazon could put pressure on existing businesses to improve working conditions (salary, benefits, etc.), or further automate their systems allowing them to operate with fewer employees. In either situation, the consumer will be better off.
As far as making Amazon the employer of choice in the retail industry, one must completely redefine retail if this question is to be addressed.
Whether you want to call these employees retail or warehouse, Amazon is hiring brand advocates. Paying them well, giving them benefits, working for a great brand, every person they hire will be talking about Amazon.
What retailer would not want that? Just sayin’….
There are a lot of twists on this question, but I guess the key question is “How do you invest the savings on infrastructure costs if you are an online retailer?” If you’re not building or renting brick and mortar locations, what do you do with the cash? One choice would be to make higher profits and pay larger dividends. Or maybe pay higher executive salaries.
Could this promotion for fulfillment workers reveal the “secret sauce” at Amazon? By offering higher salaries and better benefits they can expect a more productive workforce. By emphasizing customer service and directing their above average workforce toward becoming number one they are able to outperform the competition.
The only thing that confuses me in all this is that Amazon also purchased a robot manufacturer awhile back. Is this effort an admission that the day of the fully automated fulfillment center is still a ways off (or at least beyond the 2013 “peak”)?
This sounds like they are speaking in code. What does 30% more than traditional retail mean? Thirty percent more than minimum wage or close to it? Pays up to 95% of tuition? Or does this mean really 5% but in some kind of rare circumstance it could be 95%, such as 95% of the first $100. They just don’t spell out the specifics. And for good reason. No business is in the business to provide handouts without something in return. My guess is Amazon is as good as they need to be, and not more.
Let’s see: 100 million +/- jobs in the U.S., Amazon will be adding 5,000; that’s .005%. While I wish all 5,001 parties well, I think the effect will be small…really, really small.
Amazon appears to be taking a page from Zappos. Now there are two companies looking to be the best at what they do. Retailers around the globe can take a page from their book. Now will it make a difference? That is to be determined. But it is great to see this large hiring commitment.
Just another example of Amazon’s assault on its retail brethren. Remind me again how bad Walmart is that it puts some stores out of business, maybe, one at a time. Amazon undermines broad swaths of retailers through pricing, depth of merchandise, breadth of merchandise and now in employment practices. Will the fairy kingdom become a reality when Amazon is the only retailer left standing?
Yes. Amazon is establishing good benefits, good pay, and a clear career for employees that wish to join their team, and make Amazon a career choice. Google, eBay, Starbucks and others need to take note!
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It’s great to hear about hiring in any form as the economy continues to be a the center of many business decisions. I am not sure that there are too many potential employees out there working in fulfillment that are going over the compensation package with a fine tooth comb, deciding whether the offering is the right mix for them. I don’t mean that they don’t care or are unable, but rather I mean that many applicants may be making a move into the industry for the first time and the compensation will be easily differentiated by their current roles. For some, just the opportunity for a job with a firm that carries the name Amazon is enough.
I wonder what percentage of the 5,000 positions will be filled by folks making upward moves from lower paying positions versus current employees in similar roles making lateral moves for a better compensation plan.
Is the compensation package being offered by Amazon hugely different from other competitive options? If the hiring process proves overly successful, if employees pack up and move from other established fulfillment and retail opportunities, it is hard to see how it wouldn’t have an effect on other retailer’s offerings.
The key part of this story is “sustained innovation.” Many retailers talk about innovation, but they’re not making this kind of investment. Retailers who want to compete with Amazon should read this story and take a fresh look at their approach to the market. This is proof that “same old” won’t cut it any longer.
The Amazon name carries great appeal and so do some of the benefits being offered, but working in a fulfillment center is not the same as working in retail. It is far more similar to working in a warehouse, be it a grocery warehouse or any other. Traditionally, warehouse positions have paid better than those for most at retail, especially at the entry level, so I am not sure the comparison is valid.
Their fulfillment centers have not been without their issues. There have been stores with headlines such as “Amazon warehouses: literally worse than coal mines” based on an Amazon fulfillment location in Rugeley in the U.K. Another was regarding workers suffering from the heat in its Pennsylvania center.
That doesn’t mean the fact that they are hiring 5,000 workers isn’t good news for those that are getting the jobs, but does leave me wondering about the impact Amazon’s growth is having on traditional retailers.
It is certainly a step in the right direction. With so many people still out of work, and so many older professionals not able to find work, they have been forced to take lower paying jobs, and at least at Amazon they will be getting benefits, and even some stock. Hopefully, Amazon is not the type of company that practices age discrimination. I don’t think this move will have any effect on how other retail employers pay until the economy improves further.
Why wouldn’t an aspiring retail or logistics oriented person not want to work at Amazon? The benefits package, the opportunity to work for a highly successful, growing organization, and stock options all point to these jobs as a chance to do better than the typical retail job. Smart retailers in these areas should look at their highest performing employees and find ways to keep them.
Amazon can and should demand excellent customer service from these people to help keep the growth and thus the job security on track!
Comparing these jobs and their compensation package to traditional retail is a mismatch. These jobs are going to be primarily in warehouse fulfillment. Thus, the job skills will be more analogous to UPS than to R.E.M.
And the compensation package will need to be as well. Much more lucrative than traditional retail if they want to hire the right people. Apples and oranges.
Amazon is a good choice—besides all the perks. It is work in a structured environment that follows the Kaizen process—the Japanese word for “improvement,” or “change for the better.” This philosophy supports practices that focus upon continuous improvement of processes. A company that has built its business on Kaizen is Danaher. A very successful company that covers many industries.
Amazon, key priciples of improvement, good pay—this is a good place for many people to apply and make a shopper’s day a bit better.
Amazon is not hiring “retail” employees. They are hiring warehouse and delivery employees. There are different skill sets involved. For instance, there is no requirement that a retail employee have a drivers license but a delivery job would require that. In that every market only has a limited number of people willing to work, Amazon could put pressure on existing businesses to improve working conditions (salary, benefits, etc.), or further automate their systems allowing them to operate with fewer employees. In either situation, the consumer will be better off.
As far as making Amazon the employer of choice in the retail industry, one must completely redefine retail if this question is to be addressed.
Whether you want to call these employees retail or warehouse, Amazon is hiring brand advocates. Paying them well, giving them benefits, working for a great brand, every person they hire will be talking about Amazon.
What retailer would not want that? Just sayin’….
There are a lot of twists on this question, but I guess the key question is “How do you invest the savings on infrastructure costs if you are an online retailer?” If you’re not building or renting brick and mortar locations, what do you do with the cash? One choice would be to make higher profits and pay larger dividends. Or maybe pay higher executive salaries.
Could this promotion for fulfillment workers reveal the “secret sauce” at Amazon? By offering higher salaries and better benefits they can expect a more productive workforce. By emphasizing customer service and directing their above average workforce toward becoming number one they are able to outperform the competition.
The only thing that confuses me in all this is that Amazon also purchased a robot manufacturer awhile back. Is this effort an admission that the day of the fully automated fulfillment center is still a ways off (or at least beyond the 2013 “peak”)?
This sounds like they are speaking in code. What does 30% more than traditional retail mean? Thirty percent more than minimum wage or close to it? Pays up to 95% of tuition? Or does this mean really 5% but in some kind of rare circumstance it could be 95%, such as 95% of the first $100. They just don’t spell out the specifics. And for good reason. No business is in the business to provide handouts without something in return. My guess is Amazon is as good as they need to be, and not more.
Let’s see: 100 million +/- jobs in the U.S., Amazon will be adding 5,000; that’s .005%. While I wish all 5,001 parties well, I think the effect will be small…really, really small.
Amazon appears to be taking a page from Zappos. Now there are two companies looking to be the best at what they do. Retailers around the globe can take a page from their book. Now will it make a difference? That is to be determined. But it is great to see this large hiring commitment.
Just another example of Amazon’s assault on its retail brethren. Remind me again how bad Walmart is that it puts some stores out of business, maybe, one at a time. Amazon undermines broad swaths of retailers through pricing, depth of merchandise, breadth of merchandise and now in employment practices. Will the fairy kingdom become a reality when Amazon is the only retailer left standing?
Yes. Amazon is establishing good benefits, good pay, and a clear career for employees that wish to join their team, and make Amazon a career choice. Google, eBay, Starbucks and others need to take note!