Amazon has embarked on an extraordinary hiring binge this year, vacuuming up an average of 1,400 new workers a day and solidifying its power as online shopping becomes more entrenched in the coronavirus pandemic.
The hiring has taken place at Amazon’s headquarters in Seattle, at its hundreds of warehouses in rural communities and suburbs, and in countries such as India and Italy. Amazon added 427,300 employees between January and October, pushing its workforce to more than 1.2 million people globally, up more than 50% from a year ago. Its number of workers now approaches the entire population of Dallas.
The spree has accelerated since the onset of the pandemic, which has turbocharged Amazon’s business and made it a winner of the crisis. Starting in July, the company brought on about 350,000 employees, or 2,800 a day. Most have been warehouse workers, but Amazon has also hired software engineers and hardware specialists to power enterprises such as cloud computing, streaming entertainment and devices, which have boomed in the pandemic.
The scale of hiring is even larger than it may seem because the numbers do not account for employee churn nor do they include the 100,000 temporary workers who have been recruited for the holiday shopping season. They also do not include what internal documents show as roughly 500,000 delivery drivers, who are contractors and not direct Amazon employees.
Other retailers — both with physical stores and online ones — competed with Amazon on Black Friday and were strategising on how to make the most of the busy end-of-year sales period, which has been upended by the pandemic. Many encouraged curbside pickup and put social distancing measures in place on Friday, but they saw light foot traffic. Amazon has the largest share of e-commerce, where sales are expected to grow by as much as 30% over last year’s holiday season, according to the National Retail Federation.
Amazon’s rapid employee growth is unrivaled in the history of corporate America. It far outstrips the 230,000 employees that Walmart, the largest private employer with more than 2.2 million workers, added in a single year two decades ago. The closest comparisons are the hiring that entire industries carried out in wartime, such as shipbuilding during the early years of World War II or home building after soldiers returned, economists and corporate historians said.
“It’s hiring like mad,” Nelson Lichtenstein, a labor historian at the University of California, Santa Barbara, said of Amazon. “No American company has hired so many workers so quickly.”
Even for a company that regularly sets new superlatives, Amazon’s employee growth stands out as a stark illustration of its might. At this pace, it is on track to surpass Walmart within two years to become the world’s largest private employer.
Its expansion is unfolding as lawmakers and regulators in Washington and Europe have sounded the alarm over tech power. This month, European Union regulators brought antitrust charges against Amazon, accusing it of unfairly using its size and access to data to harm smaller merchants in its marketplace. Amazon has said merchants are thriving on its site, with their share of sales growing in the pandemic. The Federal Trade Commission is also examining the company, with President-elect Joe Biden expected to continue scrutinising the tech giants.
“We are turning into Amazon nation,” said Margaret O’Mara, a history professor at the University of Washington and a contributing New York Times opinion writer.
Having employees in nearly every state gives Amazon, which has warehouses around the country to be closer to customers, potentially outsize political leverage, O’Mara said. She added that history has shown there are risks when a region or country becomes too dependent on any one employer, although she said Amazon had not reached that point.
Amazon has portrayed its hiring as a boon for workers laid low by the pandemic-induced recession, as unemployment has soared and as restaurants, airlines and other businesses suffer.
“Offering jobs with industry-leading pay and great health care, including to entry-level and front-line employees, is even more meaningful in a time like this,” Jeff Bezos, Amazon’s founder and chief executive, said last month when the company reported blockbuster financial results.
Some government policies have helped Amazon’s recent growth. In March, a taxpayer-funded $2 trillion stimulus package allowed local governments to shut down traditional retail stores to reduce the spread of the virus. As the stores closed, demand for items through Amazon rose — and it hired.
Adding so many new workers so fast in a pandemic has been a herculean task. Many workers feared catching the coronavirus in warehouses, so Amazon rolled out a fleet of safety measures to address COVID-19. And it revved up its hiring machine, which relies on technology and traditional recruitment.
That includes promoting its training, benefits and pay. Of its 810,000 workers who are in the United States, about 85% are front-line employees in warehouses and operations who earn a minimum of $15 an hour. That is higher than traditional retail work, where an average sales worker makes $13.19 an hour, but lower than typical warehousing jobs. On Thursday, Amazon said it would pay bonuses of $300 for full-time employees and $150 for part-time employees.
To get the word out, Amazon used staffing agencies and advertised on television, billboards and in mailboxes by highlighting sign-on bonuses of up to $3,000 and its precautions against COVID-19. In one recent TV spot, an Amazon employee wearing a mask said, “Safety, safety, safety!”
In many places, the hiring has come easily because Amazon is one of the few employers with open jobs. In the week leading up to Sept. 16, which the company billed as “Career Day,” it said it received more than 384,000 job applications in the United States and Canada, or 38 a minute.
“It is happening in the context of an unprecedented loss of jobs elsewhere in the economy,” said Ellora Derenoncourt, an assistant professor at University of California, Berkeley, who has studied Amazon’s minimum wage.
Amazon is not the only beneficiary of how the pandemic has pushed people toward buying online instead of in stores. Walmart has added 180,000 employees in the United States since March, and its online sales rose 79% in the latest quarter. Target’s e-commerce sales soared 155 per cent.
In that sense, this downturn has differed from past recessions, when usually all industries slowed, said Jed Kolko, chief economist at Indeed, the online jobs site. “This period has been partly about a recession but also about a pretty dramatic shift of economic activity from some sectors to others,” he said.
Just two years ago, Amazon’s workforce numbered fewer than 650,000 people. At the time, the company hit the brakes on hiring to focus more on profits. The hiring pace picked back up a year ago, after it introduced one-day shipping in the United States, an enormous effort that required more warehouses and more workers to pick, pack and sort packages.
When the coronavirus hit the United States in March, online shopping condensed years of expansion into a few months. From April to June, Amazon said, it sold 57% more items than a year earlier.
That spurred its first pandemic hiring wave of about 175,000 temporary workers. Many were hired to replace employees who had taken advantage of an unlimited unpaid time off policy at the outset of the pandemic. To attract new employees, Amazon offered workers an extra $2 an hour and increased overtime pay. It said the extra wages were not “hazard pay” but incentives.
Amazon had the hiring infrastructure in place to grow fast, said Ardine Williams, vice president for workforce development. As COVID-19 kept people like her elderly parents sheltering in place for safety, she said, consumers turned to e-commerce, accelerating the need to hire more.
“Some of that growth has clearly been planned,” she said. “I think that the head count ramp, though, has really been fueled by customer demand.”
Over the summer, Amazon converted most of the 175,000 temporary workers to permanent employees and ended the extra pay bumps for all workers. Since then, it has continued with waves of hiring.
The company has also almost tripled the number of U.S. warehouses used for last-mile deliveries this year, said Marc Wulfraat, founder of logistics consulting firm MWPVL International, who tracks Amazon’s operations. The delivery drivers are usually contractors, so Amazon does not disclose their numbers in regulatory filings.
“They have built their own UPS in the last several years,” Wulfraat said. “This pace of change has never been seen before.”
Williams said Amazon also built relationships with companies that were reducing staff, such as Uber, American Airlines and Marriott, to promote its hiring.
“We dedicated a group that did nothing but connect with organizations who were furloughing people, whether it was temporary or permanent,” she said. “That allowed us to take a skilled, quality workforce and very quickly and easily move them into opportunities that were appropriate at Amazon.”
The effort has been aided by 1,000 technology workers who create software for Amazon’s human resources teams, many building portals and algorithms that automate hiring, she said. Prospective employees can find jobs, apply and be hired entirely online, without talking to a single person.
To grow so much, Amazon also needs to think long term, Williams said. As a result, she said, the company was already working with preschools to establish the foundation of tech education so that “as our hiring demand unfolds over the next 10 years, that pipeline is there and ready.”
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