This is a fascinating article from Josh Bersin citing a leaked memo from Amazon that suggests that the company may soon start to run out of people to hire in a number of their US warehouses. With staff turnover over 100% in many areas (and in some cases over 200%), it's reasonable to assume that the local available workforce for some Amazon locations will be rapidly depleting; particularly given that Amazon is in competition for talent. Amazon is the second largest employer in the US with c. 1.6m global employees. Just imagine the hiring challenges if their attrition is averaging anywhere close to 100%.
According to the original article, raising salaries and increasing automation are two of 6 levers that Amazon can pull to delay the challenge. Hopefully at least one of the other levers focuses on the employee experience - optimizing roles to make them meaningful and fulfilling, providing developmental opportunities and career progression.
I've written a lot recently about the extraordinary hiring market that we're in, the fact that in both the US and the UK there are now more open positions than there are unemployed people. I've written about the need for employers to tap in to the 'hidden workforce' to gain skills and talent that may not be an immediate match if companies are looking for job-ready candidates. And in my most recent article I wrote that "It’s important to also stress that reducing employee turnover should be a strategic focus for the boardroom, not just the HR leadership team". Can you imagine many more pressing strategic challenges than the risk of running out of employees?
I'm sure there are incredibly clever people at Amazon with a plan in place to tackle their talent challenges. They will be operating on tight margins where productivity levels are essential to maintaining profitability. And presumably they will know exactly what their employee turnover is costing them in terms of hiring costs, onboarding, ramp-up time and management focus. And I'm sure one of the first things they will have done is to speak to their employees to understand what would make them want to stay in role for longer.
There are some great examples in the market of companies gaining strategic advantage by taking innovative approaches to hiring, retaining, reskilling, redeploying and valuing talent. Now is the time to be brave, whether you're close to running out of people to hire or merely feeling the pressure of the current hiring market. Inflation and a stagnant or receding economy may ease the hiring pressures a little but this will remain a candidate-driven market for a long time to come.