During the initial months of the coronavirus pandemic, Amazon had a turnover rate among front-line workers that was at least double the industry average. This has raised questions about the role of automation in employee retention. Some researchers suggest that increasing automation may contribute to higher turnover rates, although it can also reduce turnover costs for hiring and training replacement workers. Amazon has employed automation as a strategy to drive speed and efficiency in its operations. The company has seen a turnover rate of around 100% for front-line workers, which is significantly higher than the industry average. Critics argue that Amazon’s business model treats workers as expendable, leading to higher injury rates and turnover. However, Amazon states that it has created hundreds of thousands of jobs since the pandemic began and has supported its workforce during this time. Overall, reducing turnover is a focus for most companies due to the costs involved in hiring and training new employees, and having good management practices can contribute to lower turnover rates.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| High turnover rate at Amazon | Human resources management | Improved employee retention strategies and reduced turnover rates | Pressure to address worker churn and improve job stability |
| Role of automation in employee retention | Shift in labor dynamics | Increased automation causing higher turnover rates while reducing hiring and training costs | Companies seeking efficiency and cost reduction |
| Amazon hiring and turnover statistics | Workforce composition | Smaller front-line workforce due to continued growth and automation; increased job opportunities during holiday season and building openings | Seasonal demand and company growth |
| Amazon’s turnover rate compared to industry | Workforce dynamics | Amazon turnover rate at least double the industry average, suggesting a high turnover model and potential negative impact on worker well-being | Expendable worker treatment and productivity pressure |
| Higher-than-average injury rates at Amazon | Occupational safety | Increase in injuries during busy periods due to fast-paced work resulting in time off or termination; contributes to high turnover rate | High work speed and pressure on productivity |
| Importance of management practices | Workforce management | Emphasis on positive feedback, suggestions, and rewards from managers as factors in reducing turnover and improving employee satisfaction | Positive management practices |
| Role of automation in turnover and management | Technological impact on work | Increased automation contributing to higher turnover rates and potential health hazards; simplifying aspects of warehouse work for easier replacements | Automation simplifies work and reduces training time |
| Deleterious impacts of technological change | Labor market impact | Increased job instability and wage stagnation resulting from automation and the erosion of job stability | Potential negative consequences of technological change |