What If Santa Asked ’Have You Been a Good Employer’?

Photo by Wicked Monday on Unsplash

As 2021 is drawing to a close, we probably agree that we have been better adjusted and equipped for this second year of the pandemic. For one thing, there has been a global Covid vaccine rollout, which likely helped many countries across the world to manage the situation better and keep their economies relatively open. Also, one might suggest that our experiences of 2020 have made us all stronger in some ways; for example, we are more accustomed to remote work, to safety protocols and guidelines for public events, to social (or physical) distancing, and to a general reservedness. Unfortunately, despite continuous efforts, infection levels are once again rising and with the emergence of Omicron there is no certainty of what is to come… perhaps a Stoic motto of ‘It doesn’t get easier, you just have to get stronger’ might be a thought to hold on to for now?

On top of the ongoing pandemic effects on public health, 2021 was tough because it also showcased a complex stew of related challenges on a global scale.

First, at the beginning of the year, the COVID-19 pandemic disrupted global trade. Now, by the end of it, we can also speak of a disruption of the labour market. Global labour shortages seem to be a worrying problem for businesses around the world. Naturally, there is a mix of factors driving this trend, such as a retiring cohort of baby boomers, jobs that are increasingly becoming technology-based, and generally an increased demand for new types of work to be done… Yet, an interesting opinion published in a recent Forbes article suggests that it is not just a crisis of labour, rather it is a crisis of quality jobs!

Such a shift of labour market dynamics can be well seen from the case of Amazon.

It is safe to assume that more than half of the readers here shop on Amazon. According to some stats, almost 90% of UK consumers, close to two-thirds of Americans and 92% of German online shoppers use Amazon. Indeed, Amazon is the most successful retail giant in the world. In his famously cited 2016 letter to shareholders, Jeff Bezos attributes the success to a fully customer-centric approach, saying “You can be competitor-focused, you can be product-focused, you can be technology-focused, you can be business-model-focused… But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.” Surprisingly though, the letter does not say anything about employees at Amazon…

On the employee side, Amazon is known for its extraordinary amount of hiring and excessive turnover of staff. For example, in 2020 Amazon went on a so-called hiring spree, adding 427,300 employees in just 10 months. Yet, its employee turnover, which stands at roughly 150% annually, is similarly staggering. Some time ago, we could have looked at Amazon’s turnover as an insightful case for an efficient HR strategy. Indeed, several accounts indicate that employee attrition was a conscious management decision. Amazon heavily invested in technology, automating HR processes, employee onboarding and training processes, which helped the company to hire people quickly and teach them their jobs quickly. This system allowed for a temporary approach to an hourly workforce, where people do not stay with Amazon for longer than two years, thus feeding the company with a constantly renewed and motivated workforce.

The recent labour shortage made Bezos reconsider this though. The pandemic exposed the system’s vulnerabilities and challenged the premise that it is sustainable. Could even a giant like Amazon run out of American workers?

In 2020, as we all set out to spend much more time at home and in isolation, which naturally increased the demand for Amazon services, Amazon workers stopped showing up to warehouses, either due to Covid illness or concerns over it. As the pandemic kept dragging on, Amazon employees became increasingly tired, burned out and dissatisfied. There were more and more stories of workers caught up in this unforgiving automatized HR system, and of instances of erroneous penalties for missing work and firings. And workers became increasingly vocal about basic worker rights.

So, could Amazon run out of staff ?

As Amazon’s squeezed labour pool indicates, yes, it could… especially if no changes to job quality is introduced.

Amazon seemingly realized this as well – the company recently changed its tone and added a new direction to its vision. In his 2020 letter to shareholders Bezos said “We have always wanted to be Earth’s Most Customer-Centric Company. We won’t change that. It’s what got us here. But I am committing us to an addition. We are going to be Earth’s Best Employer and Earth’s Safest Place to Work.”

Can Jeff Bezos carry on with his obsessive customer focus, while also looking after his employees?

A relevant Glassdoor study indicates that the answer is a clear yes, as there is a strong correlation between employee well-being and customer satisfaction. In other words, a company with a happier workforce can deliver better customer satisfaction. How surprising then that so many other companies are struggling with this too!

Hopefully this Christmas, Amazon (and many other employers) can proudly report to Santa that they have been good! 🙂

Merry Christmas and happy holidays!

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