The Amazon Bonus

It looks like Amazon has been forced to do something it is genetically opposed to – pay workers more. 

Amazon has had a recruitment crisis in the US for a while. Staff turnover in its warehouses has been so high that it has started to run out of replacements. The New York Times had estimated that even before the pandemic, Amazon’s staff turnover for hourly-paid workers was running at 150% per year – so replacing your warehouse staff entirely one and a half times per year. This is clearly unsustainable. Also, as the word gets around how poor pay and conditions are, fewer people are prepared to join – and no one who previously worked for Amazon appears to want to return.

Amazon has for several years run TV ads trying to dispel its image as a poor employer. But, of course, things must be pretty awful if an employer is forced to do this. Although the ads are not a great idea as they reinforce how poor working conditions are in Amazon warehouses, they serve as an effective reminder.

With Christmas approaching, Amazon has been as pragmatic as ever and dug deep to offer some healthy sign-on bonuses of up to £3,000 for the Christmas period. The £3,000 bonus is for their Exeter site, with other sites typically offering £1,500. However, this offer will probably come with some caveats and is unlikely to be paid until the end of the Christmas contracting period.

The bonuses make it harder for other employers to compete (but that’s life). It also begs the question of when Amazon will realise that treating warehouse staff well and retaining them would be cheaper and deliver better results for their business.