Amazon’s unique hiring problem, explained

Why the company is running out of workers.

MediaNews Group/The Riverside Press-Enterprise via Getty Images / Contributor

Over the years, Amazon’s obsession with customers has helped it scale its world-class delivery services. (Who wouldn’t want their groceries dropped off in 13 minutes?)

But providing exceptional customer service hinges on having the workers to carry it through, and Amazon may be running out of them, per Recode.

A leaked internal memo…

… suggests the company could run out of candidates to staff its warehouses by 2024. The problem is twofold:

  • Rapid hiring: Amazon’s workforce doubled from ~800k to ~1.6m employees from 2019 to 2021.
  • Rapid turnover: Many Amazon jobs are viewed as transitory — the company churns through ~3x more workers than competitors. (Is Bezosism to blame?)

If you’re wondering how it’s even possible for an HR department to hire so many people so fast, you’re spot on — Amazon workers have been hired (and fired) without talking to a single human.

Rapid hiring and firing…

… may have put Amazon in this mess, but the company has options to get out of it, like:

  • Relaxing the rules: In places with a higher risk of worker shortage, Amazon’s been more lenient about its stringent workplace policies.
  • Increasing pay: Internal research at Amazon found that every dollar added to its minimum wage attracts 7% more workers into its hiring pool. Following that logic, an increase of $1.50/hr would extend Amazon’s runway by another three years.
  • Better planning: Amazon’s HR division believes the company can improve the situation by ensuring new warehouses have adequate local labor pools.

Another possible solution? Doubling down on automation.

Robots…

… are nothing new to Amazon, which purchased manufacturer Kiva Systems in 2012 — a deal that’s reportedly saved Amazon billions.

The company has an internal goal of increasing productivity by 25% by 2024 strictly through improved automation.

By then, if current hiring trends continue, a robot-dominant workforce may be Amazon’s only option.

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Psst

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In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

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