According to documents marked ‘Amazon Confidential’ provided to Engadget*, Amazon’s own internal costing for their staff churn is $8b annually, a cost of $5,400 (£4,500**) for each one of their 1.48 million employees. That’s equivalent to 24% of their 2021 Net Profit.
An investigation by the NYT found that: amongst hourly employees – churn was 150%. Work from the WSJ have found that staff churn is around 100% in warehouses.
Amazon found that ‘regretted attrition’ occurs twice as often as ‘unregretted attrition’, the former in 2021 ranged between 69% and 81% across all levels (from warehouse to VP levels). Only one out of three new hires in 2021 stayed with the company for 90 days or more.
Amazon set up CTSMD***, three years ago which now has 600+ staff to help find a solution, but it appears to still to have to get to grips with the problem despite some 97 programs and 2,000 learning modules they oversee.
It is rare for this type of credible data to emerge, and its important because:
- Amazon see this as a problem and are trying to find ways to solve it
- Although Amazon’s figures may be well above industry averages, ‘regretted attrition’ or ‘churn’ is endemic, it effects all companies both large and small – the average UK churn rate is 13%.
- The cost is material enough to look for methods of reduction, if for no other reason than the change in economic conditions
Shutting the Stable Door
Some may argue that with zero contract hours and minimum wage levels, that they are not that surprised. Yet research on the reasons why people leave their jobs, points to toxic work culture/don’t get on with their supervisor as the leading reason for churn and not money, especially amongst lower remunerated jobs.
In medicine Big Data techniques can, by examining data find trends previously not seen, be used to re-purpose existing solutions. This approach is beginning to be adopted to try to reduce employee churn. However it smacks of trying to shut the stable door, after the horse has bolted. Whereas ‘A stitch in Time Saves Nine’
Prevention - Find Out More
** Conversion £1=$1.18
***Consumer Talent Strategy, Management & Development