BY MARK B. SOLOMON, EXECUTIVE EDITOR – NEWS
WORKFORCE MANAGEMENT
Strategy
AMAZON.COM INC. NEVER ARRIVES IN TOWN
EMPty-handed. Whether it be pre-payment of 95 percent
of employee tuition to pursue careers in high-growth
industries, classroom training within its fulfillment centers, benefits that start on the first day of employment, or
20 weeks of paid maternity leave, the Seattle-based e-tail-ing giant will do whatever’s needed to grab qualified DC
labor.
This “PacMan” gobble-up strategy is a necessity given
Amazon’s fulfillment center growth. It plans to add 45 distribution or fulfillment centers in the U.S. alone over the
next two years, according to estimates from MWPVL Inc.,
a consultancy that tracks Amazon. As of June, Amazon
operated 244 U.S. facilities, 105 of those being DCs or fulfillment centers, MWPVL said.
Amazon said in January it planned to hire 100,000
full-time employees by mid-2018, a goal it expects to
achieve given what it sees as strong and sustainable application activity. According to MWPVL, Amazon currently
employs an estimated 127,000 full-time and at least 54,000
seasonal workers, although the consultancy believes the
seasonal labor force may be much higher than that.
Notoriously tight-lipped Amazon declined an interview
request for this story.
Amazon’s wage rates will vary depending on conditions
in specific markets. It has said that while it believes it
pays competitive wages, the true value of its compensation package lies in the numerous ancillary benefits. It
is consistently in the top quartile of payers, according
to ProLogistix, a division of Atlanta-based staffing firm
EmployBridge that specializes in warehouse and DC labor.
Amazon’s expansion, combined with a pickup in fulfillment demand from the growth of e-commerce and a
multidecade low in overall U.S. unemployment, has been
responsible for a $1.70-an-hour jump in DC worker wages
since 2011 to $12.13 an hour, according to ProLogistix.
(Wages during the peak fulfillment month of December
have risen at a faster clip.) While that may not seem like
much, it should be noted that worker wages increased a
puny 15 cents an hour from 2002 to 2012, according to
ProLogistix data. In some markets, Amazon will pay up to
$2 an hour more than other warehouse and DC employers.
In an annual warehouse employee opinion poll conducted among DC workers who are ProLogistix employees, 59 percent said they are now making $12 an hour
or more, up from 26 percent in 2014. Of employees who
Amazon’s explosive expansion in fulfillment center operations will drive
up demand for warehouse labor. The question is to what degree.
For DCs, the
(hiring) heat is on
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