Shulou(Shulou.com)11/24 Report--

Oct. 18, a large number of recently leaked internal documents show that the employee turnover rate of retail giant Amazon is astonishingly high, well above the industry average. At the same time, employee turnover has pushed up costs, resulting in losses of up to $8 billion a year.

The documents paint a bleak picture of Amazon's ability to retain employees and the financial damage that its current strategy could do to the company as a whole. At the same time, the document also accused Amazon of not making full use of or tracking data in the process of training and promoting employees.

"employees at all levels of Amazon's global consumer field operations are experiencing high levels of attrition, with Amazon and its shareholders losing an estimated $8 billion a year," according to one of the documents. " In terms of size, the company's net profit for fiscal 2021 was $33.36 billion.

According to the study, "attrition" (that is, employees leaving the company voluntarily) occurs twice as often as "unnatural attrition" (fired). Data for 2021 show that the turnover rate of employees at all levels (levels 1 to 10) increased from a low of 69.5% to 81.3%. Among them, level 1 employees include entry-level positions, such as the company's thousands of warehouse assistants, while vice presidents are positioned as level 10 employees. The company also points out that only 1/3 of new employees in 2021 have been with the company for 90 days or more.

A previous survey found that Amazon's annual turnover rate among hourly workers is about 150%, twice the industry average. Amazon could run out of "American available labor" in some metropolitan areas within a few years, a related study has warned.

The new documents reveal many of Amazon's known problems, but also show that the company's workplace culture goes far beyond the warehouse. The head of almost every department feels uncertain about the future. According to one of the reports, the main reason for the resignation of duty-free business directors is the lack of career development and promotion paths, which is also the second largest reason for employees in other departments to resign.

David Niekerk, a former vice president of human resources at Amazon, said the company was "deliberately limiting promotion opportunities for hourly workers". Entry-level employees who can overcome difficulties and get promoted still have to compete with the company's preferred fresh college graduates. Of the supervisors hired in 2021, 39 per cent were college graduates, although they had little work or leadership experience, while only 4 per cent of warehouse process assistants (junior supervisor roles) were promoted to regional managers.

The documents also point out that there are considerable problems in Amazon's vast learning and development department, with about 97 projects and 2000 learning modules overseen by the Consumer Talent Strategy, Management and Development (CTSMD) team. CTSMD has been at Amazon for at least three years, during which time the number of employees, including contractors, has ballooned to 615, and operating costs are expected to reach $90 million in 2022, according to an internal report.

The document noted that most projects under CTSMD supervision were not created with financial indicators as key indicators and that the existing criteria for reviewing these projects were "not accurate enough to confuse actual expenditure". The current process also "hinders CTSMD's proper supervision and analysis of the current portfolio".

In addition to being overstaffed, the lack of clear direction on the CTSMD team has also had a negative impact on Amazon's finances. In addition to the team's annual budget of $90 million, Amazon executives from levels 3 to 8 reportedly spend an average of 113 hours a year on training, which could mean a potential waste of as much as $715 million.

"Internal controls are established to develop policies and procedures to ensure that the company's strategic mission and final financial statements are accurate," says Patricia Wellmeyer, an assistant professor of accounting at the University of California, Irvine, Paul Melachi School of Business. "for large companies, they must have good internal control elements."

Amazon commissioned external agencies to compile internal reports on its training and employee turnover rates, suggesting that the company is at least aware of these problems. While the current learning and development department still looks messy and may be hugely wasteful, Amazon is clearly streamlining it through a new program called Brilliant Basics.

Amazon declined to comment on the documents. A spokesman said: "as a company, we recognize that it is our employees who contribute to our success every day, which is why we are always assessing how well we are doing and how we can improve. Employee turnover is a problem for all employers, but we want to do everything we can to make Amazon the first choice for our employees. This needs to be achieved through the provision of good pay, comprehensive benefits, a safe workplace and effective and improving training and education opportunities. "

Amazon also refused to confirm or deny any specific claims or figures in the documents, saying in general terms that internal documents were sometimes "rejected or modified to correct information for lack of reliable data". However, it did not say whether the same was true of the documents.

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