Recruiting

Amazon Pinched by Labor Shortage

In the space of just under three decades, Amazon grew from an online book seller to a massive online retail empire. Companies that experience such tremendous success rarely do so without controversy, and when keeping prices low is part of the winning recipe, labor wages and conditions are often under constant pressure.

Amazon’s Employment Practices Criticized

Amazon, a company that employs 1 out of every 135 workers in the United States, may once have been able to unilaterally dictate its labor conditions and employees were grateful for whatever Amazon was willing to offer. However, Amazon has been in the spotlight in recent years because of complaints by drivers that they are too closely monitored by supervisors to the point that many fear retribution for simply taking bathroom breaks.

While the retail giant may have previously been able to get away with such practices, the tight labor market has given workers more choices when it comes to where to work, and Amazon is finding out the hard way it may have been pushing workers too hard.

“Amazon is facing a looming crisis,” says Jason Del Rey in an article for Vox. “It could run out of people to hire in its US warehouses by 2024, according to leaked Amazon internal research from mid-2021 that Recode reviewed. If that happens, the online retailer’s service quality and growth plans could be at risk, and its e-commerce dominance along with it.”

Drastic Measures Needed?

While an ominous forecast, 2024 is still over a year away, meaning Amazon could potentially reverse course. However, some believe drastic measures are needed soon. “Raising wages and increasing warehouse automation are two of the six ‘levers’ Amazon could pull to delay this labor crisis by a few years, but only a series of sweeping changes to how the company does business and manages its employees will significantly alter the timeline, Amazon staff predicted,” adds Del Rey.

Amazon’s potential labor shortage is a great example of the real impacts of company culture on the business as a whole. Amazon may have been able to leverage its massive market power to impose below-average working conditions for years, but as the labor market has shifted (as all markets do), Amazon is now forced to face the impact of its employment policies.

Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.