A leaked internal research memo acquired by Vox’s Recode reveals the company’s long-term labor concerns. The research at the center of the document was conducted in 2021 and warns of a limited workforce in the coming years. Large-scale changes to the company’s pay structure, termination and retention policies, and warehouse automation technology would be necessary to prevent Amazon from running out of new-hires in the areas in which it operates. Without these changes, hiring would screech to a halt.
“If we continue business as usual, Amazon will deplete the available labor supply in the US network by 2024,” the memo reads.
Amazon goes through about twice as many employees as most retail businesses. During the peak of the COVID-19 pandemic, Amazon’s churn was equivalent to the entirety of its front-line workforce year after year. This isn’t exactly surprising, given Amazon’s reputation as an incredibly unsafe, stifling, and sometimes downright unethical work environment. The company’s human resources department has been exposed for botching employees’ paid and unpaid leave. This is on top of the company’s storied union-busting habits and low warehouse worker pay. It’s only common sense that a company that seems to pride itself on making employees uncomfortable eventually runs out of employees.
Amazon has historically been able to pull this off by relying on the presence of lower-income people within a reasonable geographic radius of its facilities—a demographic the leaked research memo explicitly refers to when decrying its predicted labor shortage. (So no, Amazon is not claiming it’ll have hired literally every US adult by 2024; it knows there are people in a privileged enough financial position to never consider working there.) The memo specifies that the shortage will be especially urgent in the Phoenix, Arizona metro area and the Inland Empire region of California, where the company will have already cycled through every potential warehouse employee by the end of this year. The issue is exacerbated by other major retailers, which “poach” Amazon employees by offering higher wages and (usually) better working conditions. Target and Walmart, for example, offer candidates with prior warehouse experience as much as $25 per hour, while Amazon starts warehouse workers at $18 an hour. This stark contrast has become all the more relevant in the face of rapid economic inflation.
Wages are just one area in which Amazon might want to learn from its competitors. Lowering Amazon’s attrition rate would buy the company some time, according to the memo; it could accomplish this by adjusting its harsh termination policies and straightening out its HR issues. (It could also, you know, accommodate bathroom breaks.) Amazon could also reconsider its drug testing and background check requirements, which have disqualified some candidates from the recruitment process. If history is anything to go by, though, implementing such changes will be an uphill battle.
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