Will Amazon’s $1 billion payroll investment work to keep front lines staffed?
Amazon.com yesterday said it will invest $1 billion over the next year to raise the pay of frontline workers and that it was introducing a new perk that would give these employees early access to a portion of their paychecks.
The retail and technology giant said that its frontline workers in customer fulfillment and transportation will now earn between $16 and $26 per hour, depending on their position and where they are working in the U.S.
“Front-line employees across customer fulfillment and transportation will now earn, on average, more than $19 per hour in the U.S., and they also have access to a growing range of comprehensive benefits to support themselves and their families,” said John Felton, Amazon’s senior vice president of worldwide operations, in a statement. “Continuing to invest in pay, providing easy access to earned wages at any time during the month, and offering great benefits and career advancement opportunities are all part of our long-term efforts to be the best employer in the world.”
Amazon is introducing Anytime Pay, which provides the company’s employees with access to up to 70 percent of their eligible earned wages ahead of a pay day. The timing is up to the worker and there is no fee attached to the service. The company previously paid workers on a regular schedule either once or twice a month. Employees are expected to respond favorably to the perk, which gives them more flexibility when it comes to their personal finances.
Amazon’s actions coincide with concerted efforts to unionize the company’s warehouses and continuing criticism of its labor practices.
A Recode report in June provided details on a leaked 2021 internal memo from Amazon that posited that the rate of turnover at its warehouses would far outstrip its abilities to hire and train new workers by 2024 unless the company took action. The number of warehouse workers Amazon churns through in a year is equivalent to the size of its entire frontline staff, according to the memo. The report concluded that Amazon could forestall its staffing issues through higher wages and increased automation, but that more significant changes would be needed to avert a labor crisis down the road.