Amazon cannot keep thriving without fixing its work culture
PremiumIt needs to be more competitive as a firm people want to work for
Just because the Great Resignation may be greatly exaggerated doesn’t mean managers can breathe a sigh of relief. Yes, it’s mostly front-line and blue-collar workers—not office workers—who have been leaving their jobs at historically high rates. And even so, the quit rate is still only about 3%. And this is a metric we have only tracked [in the US] for about 20 years. But managers still need to remember: Talented people always have options.
I’ve come to think of this as the first law of firm-o-dynamics. It’s true in good economies, it’s true in bad economies, and it is especially true now, as it’s a great time to be looking for a job. Especially if you’re someone who can do your job from anywhere in an industry that has embraced remote work.
Which means that bosses still have to worry about retaining people. Consider the case of Amazon, the unique mash-up of online retail, cloud computing, groceries, streaming media, shipping and smart-home products that has come to seem as necessary to modern life as electrical wiring and indoor plumbing. Even consumers who eschew ordering products from Amazon on ethical grounds (whether to protect their local Main Street or because of concerns about its treatment of warehouse workers) likely shop at Whole Foods or use websites that run on Amazon Web Services’ cloud platform. The company’s ubiquity is how former CEO and current chair Jeff Bezos has ended up with a yacht that has its own yacht, a boat so big that a Rotterdam bridge will be (temporarily) disassembled to make room for it. It’s how Bezos’s ex-wife automatically became, by some estimates, the fourth-richest woman in the world. It’s why, as I type these words, I see one Prime van after another driving past my office window.
Yet, despite all this success, Amazon has more recently suffered a string of negative headlines for its brain-drain problem. My Bloomberg colleague Brad Stone reports that turnover in some engineering units is over 50% (a figure the company disputed). Business Insider has cataloged a litany of complaints about below-market pay, unreasonable hours and a toxic culture.
Certainly, it doesn’t help that Amazon, even more than other tech firms, relies on access to its stock to compensate workers, and that the stock has lost nearly $1,000 per share since summer. Of course, it’s still a very valuable stock, and investors took heart from its recent better-than-expected earnings report. But there are still plenty of reasons for the company to turn the talent management problems around before they get worse.
So what’s a wildly successful business to do? CEO Andy Jassy is reportedly already trying to fix Amazon’s culture problems, which is the right place to start. A Glassdoor analysis last month said culture was more than 12 times as important as compensation in predicting whether employees would leave. What keeps people from leaving? As my Bloomberg colleague Ella Ceron writes, “Predictable job schedules, job growth and recognition."
Let’s focus on the first one. Predictable schedules have been hard to come by over the past two years, with kids in and out of school and work-from-home arrangements feeling more like ‘living at work’ arrangements. But horror stories out of Amazon seem especially pervasive. One engineer, Patrick McGah, told Business Insider that his manager suggested he take a “power nap" from 9 to 10pm, then keep working until perhaps 2am. (Confession time: I also take a ‘power nap’ at 9pm, though it lasts until about 5 am.) Other employees who’ve left have shared similar stories of late-night work-a-thons. Curtailing such expectations should be a priority.
People also like to feel the work they’ve done has been noticed. These efforts don’t have to be elaborate or complicated—a simple “nice one" goes a long way. But not all forms of recognition are free: Amazon needs to review its compensation strategy for key roles, and there are signs it is doing so. While it has long said it wants to hire “missionaries, not mercenaries", that is harder to say with a straight face when global headlines focus on the founder’s boat. And it’s a problem any time employees feel that in order to get a raise, they need to get an outside offer—or quit and get rehired.
It’s tough to change a culture that’s soured, but it isn’t impossible. Part of the problem for Amazon is that these problems have become so well publicized that it may have trouble replacing the people it’s losing. Who wants to work for lower pay with longer hours? Especially if that company is known for being the come-into-the-office stickler in an industry that has embraced work-from-anywhere?
Some degree of turnover is refreshing. But good new employees can take a long time to find, as bosses can attest. Maybe for Amazon’s next trick, it could figure out one-click hiring.
Sarah Green Carmichael is an editor with Bloomberg Opinion
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