Amazon’s $3,000 Signing Bonuses Irk Workers Who Got $10 Coupons
(Bloomberg) -- Amazon.com Inc. is doling out hiring bonuses as high as $3,000 to make sure it has enough people to squeak through the busy holiday shopping season. That’s stoking resentment among existing workers who recently got coupons for Thanksgiving turkeys as a thank you for their hard work.
Social-media chatrooms where Amazon workers congregate have lit up. One worker shared a photo of a $15 turkey voucher, prompting others to boast they received coupons for $20 or $25, while others lamented that they got nothing. When a worker in Alabama said his warehouse got $10 vouchers, colleagues joked that it was barely enough to buy a turkey leg. Others mordantly counseled fellow workers to look on the bright side—at least the turkey vouchers were tax-free, unlike the bonuses.
Amazon’s willingness to risk dissension in the ranks reflects a dawning reality: Many Americans are reluctant to re-enter the workforce, despite a national unemployment rate of 6.9%, double the pre-pandemic level. Searches for seasonal work dropped 25% from 2019, according to job site Indeed.com. Partly that’s because some workers still receive unemployment benefits. Partly it’s because they’re afraid of catching Covid-19.
To help avoid delivery delays during what’s already shaping up to be a blockbuster holiday season, the world’s largest online retailer has decided to throw people at the problem, even if it ends up with too many workers. So a few weeks ago, Amazon began dangling signing bonuses. The sums depend on where the recruits live: $3,000 at some facilities in California and Illinois, $2,000 in Maryland and Massachusetts and $1,500 at many other facilities around the country.
“People who in the past might be thinking about picking up some money moonlighting with a part-time job are now thinking about the Covid-19 risk,” said Peter Cappelli, a management professor and director of the Center for Human Resources at the University of Pennsylvania’s Wharton School. “Many people without jobs still expect to be recalled, so they are having the same thought, whether picking up a short-term job is worth the risk. That’s why it is harder to find people even with the high rates of joblessness.”
Amazon didn’t address Bloomberg’s queries about staff concerns. The company offers workers a minimum of $15 an hour, health and retirement benefits, job training and opportunities for career growth, Amazon spokeswoman Rachael Lighty said. “We encourage anyone to compare our overall pay, benefits, and workplace environment to other retailers and major employers across the country,” she said.
When the outbreak struck the U.S. earlier this year, Amazon was overwhelmed by a spike in orders as Americans avoided physical stores. To get deliveries back on track and entice fearful workers to show up, the company offered temporary pay raises of $2 per hour as well as unlimited unpaid time off, no questions asked. Amazon also hired 250,000 workers to keep its operation running smoothly and will spend more than $10 billion this year fighting Covid in its warehouses.
In June, with Amazon’s stuttering delivery machine regaining momentum, the company ended the pandemic raises and began forcing workers to justify requests for time off. The decision was poorly received in the warehouses, which have been roiled this year by protests.
On Monday workers in Alabama filed a petition with the U.S. National Labor Relations Board to form a union. With enough support, the petition will proceed to a vote among those working at the warehouse outside Birmingham on whether to unionize and be represented by the Retail, Wholesale and Department Store Union. Some Amazon warehouse workers in Europe are union members, but the company’s U.S. workforce isn’t unionized.
Meanwhile, with Covid-19 cases resurging across the country, many workers believe it’s time their employer brought back the temporary raises, which many equate to danger pay.
That’s why receiving turkey coupons, when newbies are getting bonuses, rankles so much. Some workers see the Butterball-branded vouchers as a slap in the face when they’ve toiled through the pandemic, helping to push the stock and Chief Executive Officer Jeff Bezos’s wealth to record highs. The net worth of the world’s wealthiest man has surged more than $67 billion this year to $182.6 billion, according to the Bloomberg Billionaire’s index.
“If one worker gets a turkey and another worker gets $3,000, it’s the ultimate insult in compensation,” said Fred Whittlesey, a compensation expert and former Amazon employee “People constantly compare. It doesn’t matter if it’s money, a turkey or a share of stock. If someone got something I didn’t get, it immediately creates resentment.”
A California warehouse worker, who requested anonymity to avoid angering his employer, said a smiling human-resources representative handed him a $15 turkey voucher at the end of his shift. He used it to buy carne asada. “I was going to put it in the bank because it looked like a check, but it was a grocery voucher you couldn't redeem for cash,” the worker said. “They usually give us a few pieces of turkey and an extra 15 minutes for lunch break, but they can’t this year because of social distancing.”
‘Bills to Pay’
Warehouse workers get regular notices from Amazon that coworkers have contracted the virus, he adds, but most people keep reporting to work “because they have bills to pay. It would be nice to get paid a little more with all this stuff going on.”
Amazon typically tries to foster a holiday atmosphere by encouraging workers to wear Santa hats and Christmas socks. Social media posts of employees smiling and embracing one another are used to lure new recruits. That’s impossible now given social distancing requirements. And while some workers still receive turkey dinners, according to one worker, this year they’re in to-go containers that people take to their cars.
Amazon has been a primary beneficiary of the pandemic since so many businesses closed during lockdowns and many Americans prefer shopping online to the risk of visiting stores that remain open.
With Covid-19 cases spiking anew and governments implementing precautionary restrictions, Amazon’s momentum is expected to carry it through the holiday. U.S. shoppers will spend $189 billion online in November and December, up 33% from a year ago, according to Adobe Inc. Amazon gets nearly 40 cents of every dollar spent online, according to EMarketer Inc., making it the biggest beneficiary. Amazon’s advantage over other retailers grows late in the holiday season thanks to its reputation for prompt delivery.
The company is erring on the side of caution by overstaffing its facilities, according to workers in multiple states. They often end up standing around waiting for a place to work due to social-distancing measures, they said, and are sometimes asked to take voluntary time off just 30 minutes into a shift if too many people have showed up.
A worker in South Carolina said Amazon usually has two workers unloading trucks, one on each side of a conveyor that extends into the trailer. But due to social-distancing requirements, only one worker can be in the trailer at a time, creating significant delays. Employees in California, New York and Pennsylvania relayed similar accounts of idle workers and Amazon asking if they want to go home soon after their shifts begin.
The company expects to spend $4 billion in the current period on Covid-related safety measures. Beyond masks, cleaning supplies and temperature checks, much of that expense owes to lost productivity as employees take longer breaks and distance themselves from colleagues. The investment could pay off for Amazon if it retains workers as Christmas approaches.
“As things get worse and worse, people aren’t going to want to come in to work,” said Kristen Gall, President of Rakuten Rewards, an e-commerce cash-back platform with more than 2,500 retail partners. “Amazon will be able beat competitors if it convinces wary workers, but it’s going to be really expensive.”
©2020 Bloomberg L.P.