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David vs. Goliath in the Workplace

David vs. Goliath in the Workplace

How Businesses Can Attract Hourly Workers Despite Amazon’s Wage Increase

As if Amazon wasn’t already difficult enough to go up against.

In the previous year alone, the online retail juggernaut continued to steamroll through fellow sales competitors, generating a shade under $178 billion in 2017, and expanded into the grocery game, purchasing upscale supermarket Whole Foods for $13.4 billion. Amazon is even earning its stripes in today’s thriving television landscape, with 95 million subscribers active on its Prime streaming service and its production side bagging the coveted Primetime Emmy Award for Best Comedy — a feat only accomplished by three different shows in the past 11 years.

Then, almost two weeks ago, Amazon made a move that put all other businesses reliant upon hourly paid laborers on notice.

How, you ask? By adding further compensation parameters to its previous pledge to raise the company-wide minimum wage to $15/hour.

Amid criticism from longtime employees who feared that the initial pledge — which will result in the loss of certain existing incentive bonuses and stock rewards — would actually see them take home less money, Amazon laid out the following parameters as an improvement:

  • Raises of $1.25/hour for employees already making $15/hour, instead of $1/hour

  • New cash bonuses of $1,500–3,000 for hitting five, 10, 15 and 20 years with the company

  • Bonuses of $100 for good attendance during the Christmas rush

Both the minimum-wage bump and its revised bonuses are, in the grand scheme of things, changes so simple that anyone could have seen coming — but for other businesses trying to entice hourly laborers of their own nationwide, the impact will be anything but simple.

The market for workers is highly competitive right now, as American unemployment rates are at their lowest in the past decade (3.7% in September 2018 vs. 10% in October 2009).

In particular, California and New Jersey’s current rates (both at 4.2% statewide) are allowing Amazon to basically drive workers straight to its front doors — just last month, the company announced that a new fulfillment warehouse in West Deptford, New Jersey will open in time for the holidays, bringing the total of full-time workers employed in the state to 16,000.

As long as those percentages continue to hover in the lower single digits, workers will become more firmly placed in the driver’s seat to receive higher wages, bonuses, and more.

If you own a business that hires pickers and packers, forklift operators, inventory control, receiving and shipping personnel, warehouse staff and the like, how exactly are you supposed to attract workers with a Goliath like Amazon targeting the same people?

Here are a few solutions that employers and staffing agencies can use to be successful:

Pay employees more than minimum wage. Calls have raged across the country in recent years for governments at every level to raise minimum wage to 15%. It’s expected that by 2022, 17% of Americans will live in a state or metro area that has heeded those calls.

Currently, minimum wage for companies on the west coast averages anywhere in the $12–13 range, while that number is significantly lower on the east coast, sitting closer to $9–11.

No matter how you frame it, your company’s wages need to be higher, not just to win potential employees over, but also retain them. Being attractive to workers — ones looking for jobs and good ones who can be swayed to leave their current employer — will require you to offer them 10–15% more than what they could be making elsewhere. Many will jump ship from one job to another for as much as a $0.25 or $0.50 increase per hour.

Offer added incentives, in addition to a higher wage. More money to satisfy the cost of living is one thing, but for many workers — particularly those with families to support — more emphasis needs to be directed towards quality of living.

According to a recent EmployBridge Warehouse Employee Opinion Survey of nearly 16,000 employees, having more flexible HR policies ranked as one of the top factors that would help attract workers to a company or keep them firmly planted at the current one.

Added incentives such as extra paid time off for parents of young children, more creative bonuses to reward hard work, and more dedicated mental health services for employees can help your business stand out and show potential workers how much you care about them.

Give workers the option of having more flexible shifts. While the standard 9-to-5 regimen has sufficed businesses and workers alike up to now, many more employers are starting to offer different ways for their workers to structure their schedules.

It can be beneficial for companies to provide the option of 20-hour work weeks, or numerous short shifts for students, parents and semi-retired workers. As long as your workers’ performances are consistent, doing this extra step to help employees balance their private and professional lives will make them happier, benefitting you in the long run. You can be sure your flexibility won’t go unnoticed.

Need help with your business’s staffing needs? Reach out to DG Staffing today.