Photo: Amazon
Can Amazon reverse the flight of its tech workers?
Recent reports suggest that Amazon.com and its divisions have a serious human resources issue on its hands. Large numbers of the company’s skilled tech staff are leaving the company after determining that the rewards of working for Amazon do not align with their personal and/or professional goals.
Both Bloomberg and Business Insider have reported that corporate staff have been pushing back against what they view as an unrealistically demanding work environment combined with personnel policies that financially benefit Amazon while leaving them feeling shortchanged.
Sarah Schnierer, a senior program manager at Amazon, recently resigned from the company. Before leaving, Ms. Schnierer, who was part of an internal affinity group known as Momazonians, said she was disappointed by what she sees as Amazon’s lack of progress on issues important to its female workers and their children over the past few years.
“While it has been an incredibly rewarding place to work, the pressure often feels relentless and at times, unnecessary,” she wrote. “Employees are burnt out.”
Ms. Schnierer took issue with a corporate policy that freezes scheduled pay increases and stock distribution when employees are forced to take parental or medical leave. The company has since changed the policy to give workers 26 weeks off before it institutes a freeze.
Business Insider reports that Amazon leadership has been reviewing its compensation plans to see if changes are necessary in order to hold on to its top employees. People working inside Amazon who spoke to the publication said there is “an attrition crisis at the company,” with engineers and senior executives jumping ship over pay and corporate culture issues.
Ms. Schnierer expressed surprise that she lasted five-and-a-half years working at Amazon.
“I knew plenty of teams whose version of flexibility was acknowledging that emails wouldn’t be answered until midnight,” she said.
Bloomberg points out that the stress of working at Amazon may seem even worse considering the company’s compensation strategy hasn’t held up well in light of the fact that its share price fell by 24 percent since July.
Amazon caps salaries at $160,000 for its white-collar staff with stock grants added on that vest over four years. The company’s compensation plan has become less competitive with a falling stock price resulting in some highly skilled workers leaving for other companies that offer better pay in less pressurized environments.
Discussion Questions
DISCUSSION QUESTIONS: Is the turnover of skilled workers at Amazon described in recent reports in line with or below what is seen in other large companies? What would you advise Amazon or a company in a similar situation to do?
Poll
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Lee Peterson
EVP Thought Leadership, Marketing, WD Partners
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
I’ve noticed this over years of hiring: if you have X (a super hot company) on your resume, your stock just went up by 50%. So now, it’d be Apple, Nike, SBUX, Walmart, Target and especially, Amazon. Many savvy workers know this right from the get-go and as part of their plan, have X (hot company) on the 2 year strategy to make themselves more marketable. Sure, not always the case, but I’ve seen it play out in many ways, “formerly of Target,” “former VP of Walmart,” “executive at Starbucks,” etc. I’ve also seen it backfire on the employer many times as just because you worked for X, doesn’t mean you have the keys to the castle.
In any case, I believe this will be a dilemma for Amazon for years to come, especially given the fact that it doesn’t exactly look like they’re cooling off any time soon.
Never more true than in tech.
Without having worked at Amazon, one could guess that Amazon has so impacted the world with its innovation that anyone who has worked there for some time is now desired by other companies seeking to keep up with a rapidly-changing technology landscape.
As Lee said, a plus 50% paycheck to move on.
Amazon needs to stop being so greedy and start to share the wealth. Does anyone really need $200 Billion? CBS Sunday morning did a segment this past Sunday on wealth inequality in the U.S. — in the 6 minutes that it took for that segment, Bezos made another million dollars. This type of inequality will surely push staff out the door unless more is done to provide better quality of life issues.
Bezos owns a bit more than 10% of Amazon stock. As the stock rises so does Bezos net worth. If the stock dropped 24% since July, so did Bezos net worth. If Bezos were to sell a significant portion of his stock, the market will crater the stock another 25%.
As innovative as Amazon is with all things process and technology, I’m a bit surprised it hasn’t been more progressive with its pay and compensation practices. Basing a huge chunk of comp on stock appreciation is risky and it’s worked magically for Amazonians for the last 20+ years. It’s made thousands of employees millionaires, but when the stock cools — like it seemingly has for the last 6 months — then it’s natural for employees to reconsider their future, especially, when looking at creative comp packages from other competitors.
My recommendation to Amazon: take a hard look at your comp packages and re-imagine them in a similar fashion as you re-imagine other parts of your business operations.
Workers are realizing their worth, and have a lot of options for earning, a trend that won’t be reversing any time soon. Companies that don’t offer compensation plans or sufficient work/life balance will continue to struggle to attract or keep talented staff. Amazon has an added challenge from bad press over working conditions, and the very real pressure of large workloads placed on staff to support the company’s enormous growth since the onset of Covid.
Yes, this is an issue for Amazon. But it is also an issue for other major tach companies. We have heard about the Great Resignation. More than that is the Great Tech Resignation. A recent survey indicated that any are quitting because they’re physically and emotionally exhausted. And the departure of so many makes it that much worse for those who remain.
The demand far outweighs the the available talent with offers sky rocketing. The changes to the immigration laws have also cut down on the available talent. Almost three-quarters of Silicon Valley workers are foreigners.
The highest paying jobs in the future with the highest demand are all in some area of tech. Sadly, without the talent that is needed in the U.S. to continue to move forward in technology, the U.S. eventually will not be leader.
To quote Tim Cook: “The number one reason why we like to be in China is the people. China has extraordinary skills. And the part that’s the most unknown is there’s almost two million application developers in China that write apps for the iOS App Store. These are some of the most innovative mobile apps in the world, and the entrepreneurs that run them are some of the most inspiring and entrepreneurial in the world. Those are sold not only here but exported around the world … China offers me 3 football fields of talent, the U.S., a classroom.”
The difficult, to be kind, work environment at Amazon is the stuff of legend. Ever since the NYT article in 2015 that highlighted how Amazon treated its employees, Amazon has been almost constantly criticized in the press for their employment practices. Back then, Bezos responded with an internal memo where he said “I don’t recognize this Amazon and I very much hope you don’t, either.” Eight years later, it seems little has changed. The news continues to report how tough it is to work at Amazon, frankly in any role, not just tech.
So, in my mind the idea that in this economy where workers, especially tech workers, have more options than ever before, that workers would chose to vote with their feet and leave — not surprised.
“The Great Resignation” hits all companies of all sizes. Some have been able to thwart off the mass resignations by going beyond compensation and benefits and into the culture of the company. There are two choices to make. Do you want employees working for money, or do you want them working for the company?
Money gets you just so far before an employee that’s overworked and stressed out and says, “The money is not worth it.” Working for the company means a positive emotional connection between the employee and the employer. Often it is the culture of a company that makes employees want to stay.
One place to learn how employees think is to go to Glassdoor.com, where you’ll find positive and negative reviews of the companies listed. A big learning opportunity comes from studying the reviews of the Top 100 list they provide. Learn what’s working and what is not. And, if you see something you can start or stop doing as a result of studying these reviews, implement it.
It is difficult to see why Amazon should be any different than any other company when it comes to what is known as “The Great Resignation.” People are re-evaluating their lives after the past two years and attrition is a problem in many technology companies. McKinsey has done a great deal of research into this and this suggests that there is a disconnect between things employees value and the things that corporations perceive they value.
A key step, often missed, is to undertake detailed analysis of why people are leaving. With every exit there are always push factors and pull factors. Unless you understand these and the commonality between them your chances of stemming the flow are limited. Once understood, rapid actions need to be taken to address.
Amazon’s experience in hiring and retaining people is typical for new companies as they grow and expand. The first people that are the most difficult to hire and retain are skilled tech workers who have opportunities in many other industries and companies, especially as we move to a more mobile and online environment. Amazon will need to be more competitive with pay and retention benefits to keep the people that have hired or to attract new skilled workers.
Show me numbers: “reports suggest” means absolutely nothing.
The Org’s report listed in the article’s sources said that 50 VPs left Amazon in two years. The other articles rely on individuals currently working at Amazon or those who chose to leave it like Sarah Schnierer as sources for their reporting. Amazon sources, current and past, have told us that the company is facing challenges when it comes to employee retention throughout the organization.
Thaks George. The rumors may be true — or perhaps “credible” is a better word since this isn’t a true/false issue — but with few comparable metrics to other companies (and how would we weigh differing sizes and cultures?) personally, I just can’t get very excited. 50 out of … (how many)? And did they quit, get fired, start their own firms…?
I don’t doubt Amazon isn’t a place for everyone, but I also don’t doubt they’ll have little trouble finding replacements.
American workers are tired. We’ve worked at this frenzied pace for so long, and tech has set this pace. Gen Z has no interest in continuing this behavior that’s been modeled by their parents and they aren’t swayed by more money. Especially tech workers.
Tech companies need to realize that “one size fits all” comp packages aren’t the way to go anywhere. Flexibility doesn’t only mean the hours a person works, it’s situational. It means allowing employees to prioritize what’s important to them. This allows employees to be at their best.
Employers need to recognize that the office culture and comp programs of the future will be those that are most customized to the individual employee. Those will attract and retain top performers. The tricky part will be how to scale.