Amazon ‘listened’ to critics, raises minimum wage
Amazon has made a move fueled by economic imperatives and political pressure, including withering criticism from Sen. Bernie Sanders.
The online giant announced that it will increase its minimum wage to $15 for all full-time, part-time, temporary (including those hired by agencies), and seasonal employees across the United States. The wage hike, which goes into effect on Nov. 1, will benefit more than 250,000 existing Amazon employees, and more than 100,000 seasonal employees that the company plans to hire for the holiday season.
“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” said Jeff Bezos, Amazon founder and CEO. “We’re excited about this change and encourage our competitors and other large employers to join us.”
Amazon is so bullish on the plan that its public policy team will begin advocating for an increase in the federal minimum wage. The rate has been stuck at $7.25 for nearly a decade.
“We will be working to gain Congressional support for an increase in the federal minimum wage,” said Jay Carney, senior VP of Amazon Global Corporate Affairs. “We intend to advocate for a minimum wage increase that will have a profound impact on the lives of tens of millions of people and families across this country.”
Amazon’s wage hike follows heavy criticism from labor rights groups, and also from Sen. Bernie Sanders, over pay and working conditions at its warehouses. The progressive icon posted a series of Facebook videos calling out Amazon for not paying a living wage, which he describes in some posts as $15 an hour. In one video, titled “Get Amazon Off of Corporate Welfare,” he highlighted that CEO Jeff Bezos is the world’s richest person and earns $260 million a day, but many of his workers are on food stamps.
In response to Amazon’s wage hike announcement, Sanders stated he wanted to “give credit where credit it due. And I want to congratulate Mr. Bezos for doing exactly the right thing.”
“What Mr. Bezos has done today is not only enormously important for Amazon’s hundreds of thousands of employees, it could well be, and I think it will be, a shot heard around the world,” he said.
Analyst Neil Saunders, managing director of GlobalData Retail, said that while Amazon’s wage hike was politically savvy, it was driven by economic imperatives.
“Amazon’s superior growth necessitates a lot of recruitment which is becoming increasingly difficult in a tight labor market,” he commented. “This is especially so over the holiday season. Without a rise in wages, Amazon would be placing itself at a disadvantage in the labor market.” (Click here for more commentary)
Two of Amazon’s biggest rivals, Walmart and Target, previously announced plans to raise their starting wages. Target raised its minimum wage to $12 an hour with a plan to increase it to $15 by 2020. Walmart raised its minimum wage to $11 in January.
Amazon’s U.S. employees are not the only ones who will benefit from the wage increases. The company will also boost its minimum wage to £10.50 (or $13.60 USD) for the London area and £9.50 ($12.60 USD) for the rest of the UK for all full-time, part-time, temporary (including those hired by agencies), and seasonal employees.
Survey: Retailers may be hard pressed to find holiday help
Finding seasonal employees may be a challenge this year for the nation’s retailers.
That’s according to a survey by Korn Ferry in which 67% of surveyed retailers said recent hikes in minimum wages and market increases in the retail industry have made hiring seasonal staff more difficult (17% said they expect to see 5% to 10% fewer applicants this year.) Another reason that there are fewer seasonal applicants may be that nearly a fifth of respondents said they pay seasonal employees on average 5% to 10% less than permanent employees, noted Korn Ferry.
In other findings, 55% of retailer they are hiring more seasonal staff in distribution centers due to online sales.
“In this competitive market for qualified candidates, it’s important that retailers convey to prospective and current employees how their organization provides a better culture and work environment than other retailers,” said Craig Rowley, senior partner, Korn Ferry.
Despite potential hiring challenges, retailers are expecting solid sales, with roughly 33% expecting an increase in sales in 2018, and the rest expecting sales will be in line with last year. None believe they will see a decrease in sales this year. The survey also found that some retailers are shifting their discounting strategy, with 36% planning on cutting discounts this year.
As retailers get ready for the holiday season, some are putting more emphasis on their customers’ in-store experiences and are making hiring decisions that reflect that trend. Nearly 15% of the surveyed retailers are looking for employees who better align with brand culture, and 21% are putting a greater emphasis on employees who can help create strong in-store experiences for customers.
The trend of creating a strong in-store experience that reflects a retailer’s brand is boding well for those workers seeking permanent employment. Sixty-four percent of retailers said they expect a higher ratio of permanent to seasonal employees compared to last year. The top reason cited (25%) is that retailers are giving their permanent employees more hours.
“Retailers are increasingly focusing on creating a unique in-store environment, where customers can see and feel the merchandise, which helps them relate more to the company’s culture and ethos,” said Rowley. “Customers may decide to go home and make their purchases online, but that in-store experience will create greater brand affinity.”
Here are some details from the survey:
How much of an increase/decrease in total sales do you predict this holiday season over last year?
5% to 10% increase in sales, 33.33%
About the same, 66.67%
Compared to last year, have the qualifications you’re looking for in candidates changed?
Yes, I’m placing a greater emphasis on in-store retail experience, 21.43%
Yes, I’m placing a greater emphasis on fulfillment experience 7.14%
Yes, I’m placing a greater emphasis on employees who align with brand culture 14.29%
Yes, I’m placing a greater emphasis on employees who have more scheduling availability 7.14%
No, my hiring preferences have not changed since last year 50%
If you plan to hire fewer seasonal workers this year, what is the primary reason?
Reduced store sales plan requiring fewer people, 8.33%
Giving permanent employees more hours, 25.00%
I plan to hire the same or more seasonal staff this year, 66.67%
Compared to last year, what is your ratio of permanent to seasonal store employees?
Fewer permanent workers, more seasonal workers, 9.09%
About the same, 27.27%
Fewer seasonal workers, more permanent workers, 63.64%
How have minimum wage increases and or market increases in the retail industry impacted your seasonal hiring?
Hiring seasonal staff is now easier, 8.33%
Hiring seasonal staff is now more difficult, 66.67%
The trend has not significantly impacted our ability to hire seasonal workers, 25%
Do you currently have an omnichannel strategy that has been communicated to the organization?
Omnichannel strategy is still in progress, 28.57%
What are you MOST concerned about negatively impacting sales this holiday season?
General economic conditions, 50 %
Unemployment rates, 16.67%
Competition from e-commerce, 25 %
Has the growth in e-commerce sales impacted your seasonal staff hiring?
Yes, we are hiring more seasonal staff in distribution centers due to .com sales 54.55%
No, online sales have no impact on seasonal staffing (in the DCs or stores) 27.27%
Will you be utilizing your mobile shopping platform to help drive sales during the holiday season?
No (do not have a mobile platform), 9.09%
Do you count e-commerce sales in store revenues?
No, e-commerce is counted separately 18.18%
Yes, e-commerce sales fulfilled in a store are counted as revenue 45.45%
Yes, e-commerce sales made in a stores trade area are counted as revenue 27.27%
Do you have formal training programs in place for seasonal staff?
Are you trying to cut back on discounting overall this year?
Publix expanding corporate office—and workforce
Publix Super Markets is expanding in its home state.
The supermarket company announced that it plans to expand its headquarters in Lakeland, Fla., and add an additional 700 jobs by the end of 2027. The expansion will add about 190,000 sq. ft. of space and bring the building to 510,000 sq. ft.
Publix built the Lakeland facility in 2001. It originally had 800 employees there but has since grown to 1,400. Since that time, Publix has also added 500 new grocery stores and expanded to markets such as Virginia, North Carolina and South Carolina, the company stated.
“Publix’s growth is made possible by the hard work of our associates and the loyalty of our customers,” Publix CEO and president Todd Jones, said. “These additional jobs will help us support our store associates as they continue to provide the premier service our customers expect. We are proud of the role we continue to play in the great state of Florida.”
The project was made possible through partnerships with Enterprise Florida, the Florida Department of Economic Opportunity, the Florida Department of Transportation, Career Source Florida, the City of Lakeland, Polk County, the Lakeland Economic Development Council and the Central Florida Development Council.