Amazon’s turnover rate among front-line workers was at least double the industry average during the initial months of the coronavirus pandemic, reinforcing the view among some critics that the Seattle commerce giant churns through workers.
It also raises questions about the role of automation — a major strategy Amazon has employed in the last five years to drive speed and efficiency — in employee retention. Some researchers say increasing automation may be a driver of higher turnover rates, while also reducing companies’ turnover costs in hiring and training replacement workers.
Amazon said this month that more than 1.37 million people had worked in front-line roles — shuffling products through its warehouses and stocking the shelves at Whole Foods Market stores — in the U.S. at some point between March 1 and Sept. 19.
Amazon’s current front-line U.S. workforce is far smaller, even as it continues to swell due to continued growth and in anticipation of what is typically the company’s busiest times of year: its annual Prime Day sale and the holiday season. The company declined to specify its current number of front-line employees, but earlier announcements indicate it employs between 650,000 and 700,000 people in the U.S. in all roles; the front-line work force, while making up the majority of its employees, would be smaller.
That means during a nearly seven-month stretch this year, several hundred thousand people stopped working for Amazon in the U.S., even as it hired hundreds of thousands of others.
Amazon’s front-line turnover rate appears to be around 100% for that span, if not higher, a Seattle Times analysis found. That would be at least double and possibly triple the rates for the industries in which Amazon’s warehousing and retail operations are included. From March through August, the U.S. retail industry had a turnover rate of 38.1%, according to Bureau of Labor and Statistics data, seasonally adjusted. That rate for the transportation, warehousing and utilities industry was 33%.
An Amazon spokesperson, presented with these numbers, declined to comment on the company’s turnover rate or answer specific questions. She said in a statement: “We have created hundreds of thousands of jobs since the pandemic began across our seasonal and regular, full-time workforce and have supported tens of thousands of associates, on average, on COVID-related leaves during this time period, which we backfilled with seasonal employees. We are hiring 100,000-plus people now nationally in support of the holiday season and across new building openings — we launched more than 100 buildings in September alone.”
The pandemic this year caught Amazon and many other companies understaffed as they confronted out-of-season surges in demand and new safety and sanitation requirements to limit the virus’s spread. Amazon hired 175,000 temporary workers last spring and ultimately offered permanent positions to 125,000 of them. It allowed workers to take unlimited, unpaid leave as it implemented coronavirus safety measures and began widespread testing of its workforce.
Amazon said this month that nearly 20,000 of its 1.37 million front-line workers in the U.S. had tested positive for the coronavirus during the March 1-Sept. 19 period, touting a company infection rate that was generally at or below that of surrounding communities, though epidemiologists have questioned the company’s methodology.
Amazon’s high turnover rate in 2020 does not appear to be an anomaly. Researchers at the union-supported National Employment Law Project estimated the full-year turnover rate at several of Amazon’s California warehouses was between 89% and 107%, using U.S. Census data from 2017. That compared to turnover of 83% in warehousing and transportation in California and nearly 70% in the industry nationwide that year, according to the analysis by Irene Tung and Deborah Berkowitz.
“Their business model is clearly one that’s based on treating their workers as expendable, and it’s designed with a high turnover model in mind,” said Berkowitz, who directs the National Employment Law Project’s worker health and safety program and spent six years in senior roles at the Occupational Safety and Health Administration.
She cited higher-than-average injury rates within Amazon, which spike during the company’s busiest periods, such as Prime Day and Cyber Monday, according to a recent analysis of internal company records and weekly safety reports by Reveal from The Center for Investigative Reporting.
“The faster you make people work, the greater the likelihood is of injuries happening where workers have to take time off or have to be sent to a doctor, and that contributes to a very high turnover rate,” Berkowitz said.
Steve Banker, vice president of supply chain management at consulting firm ARC Advisory Group, said a turnover rate of 100% is “very, very high” in the industry. In 2017, his firm surveyed more than 100 supply chain executives. Only 4% reported turnover rates greater than 50% in the course of a year.
Reducing turnover is an ongoing focus at most companies, given the costs of hiring and training replacement workers, particularly in tighter labor markets, Banker said.
In addition to paying at least 50% above minimum wage and operating clean, well-lit warehouses, companies with the lowest turnover tended to have the best management practices, he said. These included managers who provided positive feedback to workers, offered suggestions for improvement and rewarded high performance with a pizza party or extra time off, he said.
“Management matters,” he said.
Amazon pays at least $15 an hour, well above minimum wage in many parts of the country, and offers employees a suite of benefits including health insurance and job training opportunities.
The company has also automated many aspects of its warehouses, including management and some human resources processes. Automated systems track worker productivity and those who can’t keep up or take too much “time off task” can be flagged for warnings or termination. The company has also introduced a video-game-like interface, called MissionRacer, to encourage increased productivity rates for some warehouse workers.
Increasing automation of both employee monitoring and management, and warehouse processes themselves, could contribute to increased employee turnover, while also presenting companies with a solution to it, researchers at the University of Illinois at Chicago noted in a paper last year assessing how technological change may affect the future of warehouse work.
“The assumption that streamlining processes leads in a linear fashion to greater efficiencies, and thus cost reductions, may be fundamentally flawed,” professors Beth Gutelius and Nik Theodore wrote in the paper, commissioned by the U.C. Berkeley Center for Labor Research and Education and Working Partnerships USA. “Gains could be counteracted by new health and safety hazards, as well as increased employee turnover due to overwork and burnout. The toll on workers is both physical and psychological, as increased performance metrics may push workers to exhaustion while heightening anxieties over the threat of being dismissed for missing performance targets.”
The Reveal investigation also found that reported injury rates within Amazon’s roboticized fulfillment centers were higher than for the company as a whole.
A reason why some companies are attracted to automation technologies is that they simplify or “de-skill” some aspects of warehouse work, making it easier to quickly hire and train replacements for employees who leave. One retail company manager quoted by Gutelius and Theodore described the implementation of a Kiva robotics system. (Amazon acquired Kiva in 2012.) Compared to existing technology, “the Kiva was very simple, so you can hire temporary labor to fill in and be productive in a short period of time. That was a benefit, being able to shorten the training times.”
These technologies may reduce turnover costs to companies, though not necessarily turnover itself, Gutelius and Theodore noted.
“The impacts on workers, however, can be deleterious, leading to further wage stagnation and erosion of job stability,” they wrote.
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