DISCUSSION
Will massive pay raises help Amazon attract and retain the best and brightest?
Written by George Anderson
Photo: Amazon
Amazon.com is looking to erase a competitive disadvantage it has vs. tech companies when it comes to recruiting and retaining corporate and tech employees. The retail and technology giant is more than doubling its maximum base pay to $350,000 from $160,000.
Amazon has historically offered lower base pay than its peers and made up the shortfall with restricted stock units and signing bonuses. GeekWire reports that Amazon on Monday informed staff of its intent to raise “overall compensation ranges for most jobs globally” and that stock units and bonuses would remain in place.
The pay raise decision was a response to market conditions that have seen workers leave companies, not just for better compensation but better working conditions and a healthier balance between their private and business lives.
Amazon is also changing its stock awards policy when it comes to promotions. Workers have traditionally had to wait until the next annual compensation review after being promoted. Under the new plan, they can receive the awards on a mid-year basis when warranted.
Amazon has not publicly quantified what base pay raises will mean to its balance sheet.
The new compensation plans follow recent reports from Bloomberg and Business Insider revealing that large numbers of employees were leaving Amazon due to its unrealistically demanding work environment and below market compensation levels.
Current reporting has not touched on what, if anything, Amazon plans to do about its corporate cultural issues.
Sarah Schnierer, a senior program manager at Amazon, recently resigned after being at the company five-and-a-half years.
Ms. Schnierer, who was part of an internal affinity group known as Momazonians, said she was disappointed by a lack of progress on issues important to Amazon's female workers and their children. Many of these issues became more pronounced as the pandemic affected aspects of American life.
“I knew plenty of teams whose version of flexibility was acknowledging that emails wouldn’t be answered until midnight,” said Ms. Schnierer.
The challenges expressed by Ms. Schnierer are not restricted to Amazon.
“Businesses seeking to attract and retain top talent need to understand what employees have come to expect from their employers,” Karen Fichuk, CEO of Randstad North America, told Fortune. “In addition to higher wages, workers are demanding a safe working environment, increased flexibility, and new opportunities for growth. They’ll join companies who meet those demands.”