The retail and logistics company Amazon is struggling with its employee turnover. Amazon's unequal enforcement of rules and lack of job security are among the driving factors of their labor supply issues.
OSHA's data report tells that Amazon's work injury rate doubled in 2021.
Amazon Might Run Out of Employees
Will Amazon run out of workers? As per research that Recode first reports, if Amazon continues the usual, their company will exhaust the remaining labor supply in their US network by 2024. In a leaked internal memo, the retail logistics company Amazon is alarmed by this possibility.
Of course, Amazon is concerned that its employee turnover is beyond limits. Prior to the pandemic, Amazon lost about 3% of its employees each week, or 150% for a year. In comparison, its 2021 annual revenue from transportation, warehousing, and supply was 49%, and its retail was 64.6%, which is less than half of Amazon's sales.
Bezos Acknowledges and Stresses Amazon's High Turnover Rate
Amazon founder Jeff Bezos is also concerned. Bezos initially welcomed the high turnover rate and feared that the number of long-term employees would decline, causing a march to inferiority. But in his final letter to shareholders as CEO last year, Bezos said the company needs to do a better job for its workers. He wrote that Amazon promises to be the best employer on the planet and the safest workplace.
To some extent, Bezos's change of mind may be due to a wave of union efforts in the company's camp. But Amazon also faces size issues. As the second-largest private employer in the United States, it is currently struggling to replace all lost workers. Workers and trade unions have blamed Amazon's working conditions and high employee turnover rates on the high injury rates in the company for so long.
Lack of Job Security, Robotic Technology, 'Time Off' Indicator Caused Workforce Loss
Amazon's order picker Matt Littrell, 22, in Campbellsville, Kentucky, said he has been trying to organize a coalition at the warehouse since early 2021. As per him, the company's hiring practices, productivity quotas, attendance policies, and unequal enforcement of rules are the factors in the lack of job security that led to Amazon's high turnover.
Another problem that Littrell pointed out is Amazon's 'time off task' metric which monitors the productivity of its workers and will issue write-ups, which can lead to termination if too much is received. Littrell recalled that there were instances when he took time to find an item, and the time indicator summed the time he spent and considered his total time off.
Furthermore, he added that his assigned warehouse lacks robotic technology to carry items to the picker. He also finds that containers that store items are often stuffed, which could cause injuries, difficulty finding things, and problems achieving productivity goals.
According to a report based on an analysis of Occupational Safety and Health Administration (OSHA) data released by the Center for Strategic Organizations in April 2022, Amazon's serious injury rate in 2021 is more than twice 3.3 per 100 workers in the warehousing industry and a 20% increase from the prior year. This is because the company acquired 6.8 per 100 workers' harm rates in the US of the said month.
With unemployment approaching its lowest level in 50 years, Amazon is struggling to fill all its needed positions. In a memo written in mid-2021, the company was at risk of running out of the entire workforce pool available in the metro area of Phoenix, Arizona, and the Inland Empire parts of California by the end of 2022 this year.
Regarding the research memos, a spokesperson of Amazon said there are many draft documents on various topics throughout the company, which are used to test assumptions and consider different possible scenarios but are not developed or used for decision making. The spokesperson said that the research memo does not represent the actual situation. Amazon will persist in hiring in Phoenix, Inland Empire, and across the country.
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