Reference no: EM133652378
Amazon Case: Work Hard, Have Fun, Make History
Many employers offer their associates not only base pay for their employment but also indirect compensation such as benefits, bonus pay, and vacation time. But should employers be increasing the base pay? Amazon uses "work hard, have fun, make history" as a recruiting slogan. It appears that they could now add "earn more." In 2019, Amazon decided to raise its minimum wage for all of its workers to $15 an hour. Higher pay and better benefits incentivize an employee to stay with a company long-term. It can be an ethical conversation, but it is also a profit conversation. Higher pay means introducing better candidates and better retention. Also, better benefits will cause employees to think twice before leaving their job.
Amazon has faced constant criticism throughout the years regarding the treatment of their employees, specifically the warehouse workers. From the extended hours to limited pay, many consider Amazon to have unethical labor practices. The decision to raise their minimum wage did not come because Amazon believes those are the wages their employees deserve; the decision came from high turnover and bad consumer reception. It did not help that the CEO of Amazon, Jeff Bezos, is one of the richest men in the world.
Through exit interviews, stay interviews, recruiter feedback, and engagement events, there should be a point where a company can accurately see what is causing its turnover. Many times, companies believe it is the mass-hiring industry they're in; there are more floor workers than supervisors can handle and provide with actual work and career guidance.
People want to be paid well and have access to benefits such as health insurance. It is a matter of a company deciding if their turnover costs could actually be lowered by making some changes. Workers will always want more money, but an employee is more likely to stay if they know that their rent is going to be paid.
Turnover costs include many things: recruiting, onboarding, training, and opening the job requisition when the associate leaves. For a simple job that requires minimal effort and workers that can be easily replaced for minimal cost, a company might benefit and experience a better profit by minimizing benefits and wages. A compensation and turnover analysis should be done to better grasp what solution is better for each company.
No employer wants its profits to go down. But floor and factory workers are the people who actually provide the service that the company is selling. Many companies will invest whatever money is necessary on the right machines and equipment-are human workers any different? Are they worth the investment? When you look at your product and service, the quality will only be as good as what you invested in it. So where is the profit? The profit is within the employees.
- How would you combat high turnover rates?
- Do you think Amazon's $15 minimum wage will be effective? Does it need to be higher?
- Does higher pay really assist with turnover? If so, in what way?
- Do materials and employees deserve the same level of investment?