The festive period is the busiest time of the year for most businesses, particularly for those that operate within the retail sector. A perfect example of this is Amazon. Amazon was founded in 1994 by American entrepreneur Jeff Bezos and is the largest Internet-based retailer in the world in both total sales and market share. As of December 2016, Bezos is worth an estimated $65.7 billion.
Responding to the Christmas rush
Leading up to Christmas, consumer demand for products from Amazon reaches an extremely high level and the operational logistics function of the business is placed under massive pressure as a result. Like many other retail organisations during this period, Amazon will normally recruit temporary warehouse staff or indeed offer an increase in seasonal hours for their existing warehouse employees in order to respond to this increased demand. In Scotland, Amazon has two ‘Fulfilment Centres’ – one in Dunfermline and another in Gourock in the West of Scotland. In fact, Amazon’s warehouse in Dunfermline is the biggest in the UK at 1,000,000 square feet – the size of 14 football pitches – and employs approximately 1,500 permanent staff.
However, Amazon has frequently received criticism for their treatment of workers and this trend seems to be continuing after it emerged in the media that some warehouse staff were camping out in freezing temperatures next to the Dunfermline warehouse because they could not afford the costs of travelling to work from their homes in Perth, which is roughly 30 miles away.
Amazon: A history of bad practices?
As mentioned earlier, criticism of Amazon over their treatment of workers in the UK is not a new phenomenon. In 2013, a BBC Panorama documentary revealed the tough working conditions for their employees at one of their warehouses. Amazon employees were subjected to intense working practices as well as strict performance measures. Indeed, one of the experts in the documentary remarked that such conditions could “increase the likelihood of mental illness as well as physical illness”, with trade unions also describing worker conditions as among the “worst in Britain”. These recent developments are likely to attract even more criticism and perhaps convince people that the company does not take worker wellbeing seriously, despite making public statements that it was their “number one priority”.
Given the fact that the main reason for these individuals deciding to camp outside in freezing temperatures was that they could not afford to travel to work, there have been calls for Amazon to start paying their staff members the voluntary Living Wage. The company has responded by stating that they pay their associates £7.35 an hour with an £11 an hour overtime rate.
Labour Costs Versus Profit Maximisation
This situation once again highlights the perceived conflict between the cost of labour and a company’s bottom line, and the relatively new concept of a Living Wage has added another dimension to the debate.
A recent survey of over 150 accredited Living Wage Employers in Scotland produced some interesting statistics: 67% of employers found Living Wage accreditation had a positive impact on staff retention; 66% thought it had a positive impact on recruitment; 78% felt it had a positive impact on staff morale/motivation; and 55% thought it had a positive impact on productivity.
On this basis, companies (particularly ones as large as Amazon) should have no qualms with increasing their basic wage rate for staff. However, one could perhaps argue that, when considering the popular service that Amazon offers, are consumers really going to be put off by stories like this to the extent that they stop purchasing goods from the company? So, is there any real incentive for Amazon to make effective changes apart from improving their reputation as an employer?
Whatever solution Amazon produces, we can only hope that having to camp in freezing temperatures is no longer viewed as a necessity by workers in order to make work pay.
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