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(Source: AP Photo / Julio Cortez)
Amazon took a major step earlier in the day by increasing the salaries of nearly 350,000 workers to $ 15 an hour. While it is easy to interpret this as a response to the growing political criticism that has undoubtedly influenced the timing, the rise in wages follows a classic Amazon workbook of investing heavily in execution infrastructure and to consider all costs as interconnected. Amazon normally pays large bonuses and spends a great deal on recruitment efforts throughout the country during the holiday season while hiring temporary staff. In a well-executed and well-executed movement, exposure to public relations alone will help offset some of the advertising costs and the influx of workers they receive as a result of the new policy. The first signs show that employers are looking at costs in terms of the total cost of employment, in a low-unemployment, labor-friendly environment.
Despite the importance of rising wages, it is the most attractive geographic scope of investment and will have the most profound consequences on the market. Unlike previous versions of the $ 15 minimum wage policies that are heavily grouped in dense coastal cities such as Seattle or San Francisco, Amazon's geographic footprint is highly diversified and will mark the entire Americas. Amazon's distribution centers are located in 27 states and Whole Foods sites cover even more land.
Amazon Fulfillment Center Location MapMWPVL International
The most important impact of this wage increase will be to increase the pressure on other employers to do the same, but contrary to previous pressures to achieve this increase – this effect will be felt nationally . The relevant employers will cover several business sectors, including retail, warehousing, product manufacturers with distribution centers, logistics service providers and the hospitality industry, for example. to name a few. Given the wage elasticity and the tendency of employers to offer fewer full-time hours to avoid benefits or overtime, part-time workers will be turning to more lucrative options nearby, especially as a large part of the workforce requires similar hours, skills and skills. certifications.
To illustrate our point, local job offers located around the Kenosha, Wisconsin distribution centers, post positions with skill requirements similar to those of a 10-12 partner. , $ 50 / hour, almost 33% less than the Amazon distribution center located a few kilometers!
As the pressure increases for other employers to follow, there are some key categories in which most will fall:
Fast followers: A group of employers will be encouraged to align over the next two months based on several factors, including geographic proximity to Amazon's distribution centers, overlapping types of workers, related industries and holiday seasonality. These employers will likely have to move quickly to meet fourth-quarter demand and see wage growth as a critical competitive need in an increasingly competitive work environment. Despite the reluctance, the business development needs will exert pressure and will be more evident in other warehouses, retailers and logistics companies.
The latecomersThese employers will see a sharp increase in wages, particularly in Central America, where these rates are extremely rare, prohibitive for their business and have no intention of following it. Since these types of employers are generally accustomed to extremely high staff turnover rates and large budgets of acquisition and staffing firms decoupled from their salary expenditures, the impact will not be immediately noticeable. Instead, they will double their current practices of focusing on worker acquisition and increasing reliance on last-minute temporary recruitment companies, while keeping wages at a constant level. (or slightly higher but lower than $ 15) to maintain stable labor costs. Since these line items are often found in separate parts of the income statement and the organization, it will take a significant amount of time before the actual impact is felt at the organizational level.
The undecided motivated:These employers will be the largest of the group and will be characterized by a strong willingness to react but unable to control higher labor costs from the point of view of the viability of the company. Employers in this group will fully understand Amazon's pressure on their business, but will be unable to fundamentally reconcile an almost permanent increase in one of their largest costs. A dramatic increase in labor costs, particularly in rural markets where these rates are very unusual, will in fact be financially prohibitive or difficult to explain to public investors without consequences on the price of the shares.
It is this third group of employers who want and need to respond to wage pressures that would benefit the most from a better understanding of the worker and his needs / motivations. This type of workforce prioritizes cash readily, has limited upward mobility for better performance, and often lacks access to the key benefits that would allow it to find and do a better job. A series of tactics can be employed without continuously increasing wages to meet Amazon's pressure. These included:
1. Signing Bonus – Workers will need a clear financial incentive to fill a lower-paying position and a signing bonus will be a good one-time incentive to acquire workers in a competitive environment. To avoid fraud, the bonus may be eligible after a certain period of time (ie after 15 days of employment or after a certain number of periods of work). Depending on the type of role and the number of hours, a signing bonus will be more concrete and allow workers to get money faster, which could be a priority during the holiday season.
2. Performance bonus / longevity – Workers often complain of little upward incentive to get better performance. By clearly structuring retention and performance bonuses, increasing payments based on the number of high-quality shifts will be a clear financial way to retain top people, because bonuses will help create a simple incentive to stay in place of simply look for a higher wage rate. In addition, linking premiums to specific production targets can help align incentives of employers and workers and create a marked increase in productivity in exchange for more cases.
3. Reference bonus – Workers are often called upon to open their network for employers and have little incentive to do so. Referral premiums are common in the technology industry for the highest paying jobs, but a competitive work environment provides the same opportunity to create a structured and shared incentive for referrals. It will also help reduce acquisition costs over time by diverting funds to recruitment platforms and staffing agents, which will increase retention and job satisfaction.
4. Rising wages during peak periods – Uber (no?) Popularized soaring prices, but that of the salaries of key positions such as openings, closures, rush hour, etc. are still not common in the industry. By establishing a differentiated salary level according to key roles, workers can be incentivized to occupy key slots and to collect comparable or higher wages less hours, which creates a non-permanent rise in wages that will generate always a higher income for the workers without linking the employer to a company. higher floor wage rate.
5. Transportation credits – Workers still struggle to get to work and help offset transportation costs through private ridesharing programs, such as those offered by Waze, or providing incentives for gas transportation / shuttles is a non-permanent benefit that can help recruit and retain workers.
6. Instant payment – Especially during the holiday season, the dependence on peak payday loans and the ability to quickly access your earnings is an obvious benefit that can be offered instead of long pay cycles. Employers like McDonald's are already experimenting with the same day payments and technology platforms like Uber & Lyft have paved the way for workers who collect their earnings up to five times a day!
7. Flexible hours – Last but not least, wage rates are not the only factor that determines how the modern workforce makes decisions about employment. Schedule flexibility is becoming one of the most important factors in the likelihood of recruiting and retaining talent. Taking into account open hours, less rigid, last-minute hours and the possibility of changing jobs more easily will be essential to creating a non-financial employment advantage.
As an employer looking for next steps, Amazon's mere partnership will be limited to a catch-up strategy in which public relations will illustrate how other employers are just followers. The next major public discussion of labor movements and trends will focus instead on employers who structure some of the monetary and non-monetary tactics mentioned above in order to compete in a modern work environment without entering into a merciless war on wages.
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(Source: AP Photo / Julio Cortez)
Amazon took a major step earlier in the day by increasing the salaries of nearly 350,000 workers to $ 15 an hour. While it is easy to interpret this as a response to the growing political criticism that has undoubtedly influenced the timing, the rise in wages follows a classic Amazon workbook of investing heavily in execution infrastructure and to consider all costs as interconnected. Amazon normally pays large bonuses and spends a great deal on recruitment efforts throughout the country during the holiday season while hiring temporary staff. In a well-executed and well-executed movement, exposure to public relations alone will help offset some of the advertising costs and the influx of workers they receive as a result of the new policy. The first signs show that employers are looking at costs in terms of the total cost of employment, in a low-unemployment, labor-friendly environment.
Despite the importance of rising wages, it is the most attractive geographic scope of investment and will have the most profound consequences on the market. Unlike previous versions of the $ 15 minimum wage policies that are heavily grouped in dense coastal cities such as Seattle or San Francisco, Amazon's geographic footprint is highly diversified and will mark the entire Americas. Amazon's distribution centers are located in 27 states and Whole Foods sites cover even more land.
Amazon Fulfillment Center Location MapMWPVL International
The most important impact of this wage increase will be to increase the pressure on other employers to do the same, but contrary to previous pressures to achieve this increase – this effect will be felt nationally . The relevant employers will cover several business sectors, including retail, warehousing, product manufacturers with distribution centers, logistics service providers and the hospitality industry, for example. to name a few. Given the wage elasticity and the tendency of employers to offer fewer full-time hours to avoid benefits or overtime, part-time workers will be turning to more lucrative options nearby, especially as a large part of the workforce requires similar hours, skills and skills. certifications.
To illustrate our point, local job offers located around the Kenosha, Wisconsin distribution centers, post positions with skill requirements similar to those of a 10-12 partner. , $ 50 / hour, almost 33% less than the Amazon distribution center located a few kilometers!
As the pressure increases for other employers to follow, there are some key categories in which most will fall:
Fast followers: A group of employers will be encouraged to align over the next two months based on several factors, including geographic proximity to Amazon's distribution centers, overlapping types of workers, related industries and holiday seasonality. These employers will likely have to move quickly to meet fourth-quarter demand and see wage growth as a critical competitive need in an increasingly competitive work environment. Despite the reluctance, the business development needs will exert pressure and will be more evident in other warehouses, retailers and logistics companies.
The latecomersThese employers will see a sharp increase in wages, particularly in Central America, where these rates are extremely rare, prohibitive for their business and have no intention of following it. Since these types of employers are generally accustomed to extremely high staff turnover rates and large budgets of acquisition and staffing firms decoupled from their salary expenditures, the impact will not be immediately noticeable. Instead, they will double their current practices of focusing on worker acquisition and increasing reliance on last-minute temporary recruitment companies, while keeping wages at a constant level. (or slightly higher but lower than $ 15) to maintain stable labor costs. Since these line items are often found in separate parts of the income statement and the organization, it will take a significant amount of time before the actual impact is felt at the organizational level.
The undecided motivated:These employers will be the largest of the group and will be characterized by a strong willingness to react but unable to control higher labor costs from the point of view of the viability of the company. Employers in this group will fully understand Amazon's pressure on their business, but will be unable to fundamentally reconcile an almost permanent increase in one of their largest costs. A dramatic increase in labor costs, particularly in rural markets where these rates are very unusual, will in fact be financially prohibitive or difficult to explain to public investors without consequences on the price of the shares.
It is this third group of employers who want and need to respond to wage pressures that would benefit the most from a better understanding of the worker and his needs / motivations. This type of workforce prioritizes cash readily, has limited upward mobility for better performance, and often lacks access to the key benefits that would allow it to find and do a better job. A series of tactics can be employed without continuously increasing wages to meet Amazon's pressure. These included:
1. Signing Bonus – Workers will need a clear financial incentive to fill a lower-paying position and a signing bonus will be a good one-time incentive to acquire workers in a competitive environment. To avoid fraud, the bonus may be eligible after a certain period of time (ie after 15 days of employment or after a certain number of periods of work). Depending on the type of role and the number of hours, a signing bonus will be more concrete and allow workers to get money faster, which could be a priority during the holiday season.
2. Performance bonus / longevity – Workers often complain of little upward incentive to get better performance. By clearly structuring retention and performance bonuses, increasing payments based on the number of high-quality shifts will be a clear financial way to retain top people, because bonuses will help create a simple incentive to stay in place of simply look for a higher wage rate. In addition, linking premiums to specific production targets can help align incentives of employers and workers and create a marked increase in productivity in exchange for more cases.
3. Reference bonus – Workers are often called upon to open their network for employers and have little incentive to do so. Referral premiums are common in the technology industry for the highest paying jobs, but a competitive work environment provides the same opportunity to create a structured and shared incentive for referrals. It will also help reduce acquisition costs over time by diverting funds to recruitment platforms and staffing agents, which will increase retention and job satisfaction.
4. Rising wages during peak periods – Uber (no?) Popularized soaring prices, but that of the salaries of key positions such as openings, closures, rush hour, etc. are still not common in the industry. By establishing a differentiated salary level according to key roles, workers can be incentivized to occupy key slots and to collect comparable or higher wages less hours, which creates a non-permanent rise in wages that will generate always a higher income for the workers without linking the employer to a company. higher floor wage rate.
5. Transportation credits – Workers still struggle to get to work and help offset transportation costs through private ridesharing programs, such as those offered by Waze, or providing incentives for gas transportation / shuttles is a non-permanent benefit that can help recruit and retain workers.
6. Instant payment – Especially during the holiday season, the dependence on peak payday loans and the ability to quickly access your earnings is an obvious benefit that can be offered instead of long pay cycles. Employers like McDonald's are already experimenting with the same day payments and technology platforms like Uber & Lyft have paved the way for workers who collect their earnings up to five times a day!
7. Flexible hours – Last but not least, wage rates are not the only factor that determines how the modern workforce makes decisions about employment. Schedule flexibility is becoming one of the most important factors in the likelihood of recruiting and retaining talent. Taking into account open hours, less rigid, last-minute hours and the possibility of changing jobs more easily will be essential to creating a non-financial employment advantage.
As an employer looking for next steps, Amazon's mere partnership will be limited to a catch-up strategy in which public relations will illustrate how other employers are just followers. The next major public discussion of labor movements and trends will focus instead on employers who structure some of the monetary and non-monetary tactics mentioned above in order to compete in a modern work environment without entering into a merciless war on wages.
