Source: Amazon
Does Amazon Have Something to Teach Retailers About Labor Contracts?
Amazon.com in the UK has developed a new type of labor contract for employees that gives them time off to match their kids’ summer vacations from school and breaks for Christmas and Easter.
Kids in the UK get six weeks off during the summer and two weeks each for their winter and spring breaks.
Amazon’s new contract covers 42 weeks instead of 52. Workers’ benefits packages still provide health insurance and paid time off. The retail, technology and logistics giant offers five weeks of paid time off in the UK. Three of those weeks must be used towards workers’ ten weeks off for their kids’ breaks.
The company said the idea for the new contract came from listening to employees.
“This contract provides increased flexibility and offers the chance to spend more time with children and save money on childcare, while retaining all employee benefits,” an Amazon spokesperson told Fortune. “Everyone on a term-time contract receives the same benefits as other employees in our operations network, including private medical insurance and life assurance. [PTO] also remains the same.”
Claire McCartney at the Chartered Institute of Personnel and Development told BBC News that only four percent of workers in the UK have “term-time” working.
”With the cost and availability of childcare causing huge challenges for working parents, term-time working is likely to have a positive impact on attraction and retention at a time when organizations are struggling with skills shortages,” said Ms. McCartney.
Amazon is rolling out the term contracts across the UK after successfully testing them at three locations. The company employs more than 70,000 people in the UK. It is unclear how many workers would fall under the new 42-week deal.
The contract comes when Amazon workers in Coventry have been on strike for more than two weeks. The workers, represented by the GMB union, are protesting low wages at £15 an hour. Amazon said that it pays competitive wages in the UK and recently gave workers a 10 percent raise.
GMB is attempting to become the first union recognized by Amazon in Europe.
Discussion Questions
DISCUSSION QUESTIONS: Do you think U.S. retail workers would be attracted to employment agreements similar in concept to Amazon’s in the UK? How does such a deal make financial sense for employers like Amazon?
Poll
Loading …BrainTrust
Neil Saunders
Managing Director, GlobalData
Gary Sankary
Retail Industry Strategy, Esri
In a tight labor market where it has become harder to get workers, this kind of flexibility makes a lot of sense. Childcare is very expensive and not everyone has the ability to work during school holidays when the kids are home. Moreover, many people want to spend quality time with their loved ones during the holidays, or do to things like go on vacation. I am not sure whether this will be rolled out internationally,, bit it seems like a good policy for any country.
The work from home movement is real and permanently changed the way workers think about their relationship with work and their employers. Programs like this offer creative, meaningful changes that match the lifestyles of the employees. This sounds like a terrific program that will be well received in the UK and perhaps beyond. When you consider the cost of attracting and retaining quality employees, the costs of programs like these I’m certain will pay off. The company said the idea for the new contract came from listening to employees – what a novel idea!!
Another brilliant move by Amazon and retailers should start figuring these things out on their own. With that said, finding a pool of part time workers to fill in the gap when regular workers are gone will be a challenge. It’s a great way to become employer of choice in a tight labor market.
Workers will appreciate the flexibility, and, given the current labor market, this would be attractive to US-based retail workers. How to balance term time off with real needs for keeping products moving and stores staffed during peak times, which often coincide with schools being out of session, will be a challenge.
Will this slow down efforts to unionize workers at Amazon warehouses? Not likely.
Lots of people, and companies, are learning new lessons about work/life balance. WFH and hybrid scenarios have given us all a glimpse into a whole new way of structuring our lives. These new contracts recognize and embrace the evolving priorities people have about how they spend their time. New contracts and new work cultures will certainly emerge as more people in more companies seek out these kinds of benefits.
This is a real benefit for employees with families and a positive message from Amazon to their workers. The employees’ message here is that family and life balance is important.
The U.K. has the least number of paid vacation days of any country in Europe, but still three times more than the U.S. This union agreement will surely be catching throughout the U.K. and where it isn’t already in place in Europe.
In the U.S., not so much. While senior exempt employees already do this with their earned vacation days, the idea of hourly workers having such flexibility is anathema to corporate values. Sadly.
I’m confused by specifically what these contracts provide for – it sounds like you’re not working for 10 weeks a year? – but before delving into the details, I would mention it’s my personal experience that British Companies, even their operations here in the U.S., routinely have Year-end time off policies that seem lavish by American standards; so perhaps this is an unlikely area to see ideas exchanged.
More generally: is paid time off – or in many cases even unpaid time off an important benefit (for many people)? Sure. But it’s also extremely costly since ,,well, gee, people aren’t at work !! (Which is to say that even small absences by small numbers of employees can actually threaten a business’ existence and the more employees are treated like we [supposedly] want them to be – i.e. other than interchangeable cogs – the more acute the problem becomes). So an important issue: just like pay or safety or culture or…well everything.