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Amazon Hopes to Entice New Hires in Tight Labor Market With Higher Pay, More Benefits

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An Amazon truck drives in in Philadelphia, Friday, April 30, 2021. Amazon wants to hire 125,000 delivery and warehouse workers and said Tuesday, Sept. 14, 2021 that it is paying new hires an average of $18 an hour in a tight job market as more people shop online. The company is also offering pay sign-on bonuses of $3,000 in some parts of the country. (AP Photo/Matt Rourke, file)
It's Amazon Career Day, and the second largest employer in the U.S. has plenty of jobs. 
The online job fair kicked off on Wednesday just one day after Amazon announced yet another round of hiring to keep up with its rapid expansion amid the COVID-19 pandemic
The company said that it is hiring 125,000 positions in warehousing and distribution throughout 18 states, in addition to the 40,000 corporate and tech openings it announced earlier this month. 
This brings Amazon's total pandemic-era hiring to 450,000 people.  According to its most recent earnings report, Amazon employs a total of 950,000 people in the U.S.
The engine behind this hiring surge is no secret. Amazon is in the middle of a massive nationwide build-out of facilities in order to meet growing demand for online purchases. 
"This round has really been determined based on growth and based on the number of sites that we're opening," Carletta Ooton, vice president of product assurance, risk and security for Amazon, told Cheddar. 
She noted that Amazon has already opened 250 sites in 2021 and plans to open 100 more in September alone. 
MWPVL International, a supply chain consulting firm that tracks Amazon's logistics footprint, found that as of September the company had 938 active facilities in the U.S. and 441 in the planning process. These include everything from fulfillment centers to airport hubs to a growing number of delivery stations, which handle last-mile shipping to customers. 
Ooton said that a good chunk of the new hires will work at facilities that are coming online now, while the rest will fill in roles at existing locations throughout the country. 

Wages and Bennies 

The e commerce giant, however, isn't immune to the tight labor market conditions that have made it difficult for other employers to find workers. 
"Like everybody, we feel the pinch of the tight labor market, but we also know these are really good jobs with a great starting salary averaging over $18 an hour," Ooton said. 
To attract workers, the company is giving bonuses worth up to $3,000 for certain positions, which it says brings the average starting wage for these jobs up to $18 per hour. 
The official starting wage at Amazon is still $15 per hour. The average base salary for warehouse employees industry-wide is $12.81, according to Indeed, although wages vary significantly by region, with the West Coast, Midwest, and East Coast paying more than much of the South. 
Amazon is also touting benefits such as health, vision, and dental insurance, up to 2 percent company match for 401(k) plans, up to 20 weeks of paid parental leave, and the possibility of front-line workers getting their full college tuition paid for through the Amazon Career Choice program. 
"We're spending a lot of money on signing and incentives, and while we have very good staffing levels, it's not without a cost," Amazon CFO Brian Olsavsky said during the company's second-quarter earnings call. "It's a very competitive labor market out there."
Ooton said the extra benefits and incentives were making the company more flexible in meeting employee needs.
"For us, it really is about being flexible, and meeting people where they are and need to be and making it attractive for them to be at Amazon," Ooton said. 
These kinds of starting wages and benefits have helped establish Amazon as a competitive employer across the U.S. — in some cases even helping raise wages in the surrounding labor market — but a backlash against the fast-paced, quota-based working conditions at Amazon warehouses has complicated the company's efforts to frame itself as a creator of good jobs. 
California lawmakers, for instance, passed a bill last week that would, among other things, require employers to provide their workers with a written description of productivity demands and any adverse action that would result from a failure to meet that demand. 
Ooton would not comment specifically on the legislation but insisted the company was already transparent in its productivity demands. 
"Like most employers, we measure our employees' performance, but we do that based on a lot of information about the position, tenure, and role, and we do it in a transparent way," she said. 
Complaints about workplace conditions were also behind the failed union drive at the Amazon warehouse in Bessemer, Alabama. Many employees who spoke up during the process reported a relentless pace of work and swift terminations for anyone who fell behind quotas. 

Churn Churn Churn 

Whatever the quality of the jobs themselves, some also question Amazon's reputation as a net job creator. 
Greg LeRoy, executive director at Good Jobs First, an advocacy and research organization that has scrutinized Amazon's growth strategy, said it's also worth keeping in mind that in many ways Amazon jobs come at the expense of jobs in other sectors, particularly retail, which has been devastated over the course of the pandemic. 
"It's really what economists call job churn. You're losing jobs in the retail sector, and they're being replaced by warehouse jobs," he said. "The net employment is probably negative because Amazon is so much more efficient than the average retailer."
It's also unclear what role rapid turnover plays in Amazon's hiring. A report from the National Employment Law Project found in 2017 that the average turnover rate for warehouse workers in California counties with Amazon fulfillment centers was 100.9 percent, up from 38.1 percent in 2011. 
A more recent report from the Seattle Times found that Amazon's overall turnover rate was 111 percent in the early months of the pandemic. 
Amazon declined to share the current turnover rate for warehouse employees, and Ooton said she did not know the number off-hand. 
"There are folks who want to be at Amazon long-term for their career, and we want them, but there's also people who want to be at Amazon for a short period of time and maybe even part-time, and we want them too," she said. 
LeRoy said that a high turnover rate is assumed in Amazon's hiring strategy. 
"The plan is turnover, and it's been baked in for a long time," he said.  
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