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How Amazon HR influences hiring trends

Amazon recently reached the 750,000 employee mark. As the company gets larger, so does its potential to shape wages and hiring. But its HR influence is a matter of debate.

Amazon is a powerhouse when it comes to recruiting. It hires at an incredible pace and may be shaping how other firms hire, pay and find workers. But it also offers a cautionary tale, especially in the use of AI.

Amazon HR faces a daunting task. The firm is adding thousands of employees each quarter through direct hiring and acquisitions. In the first quarter of 2019, it reported having 630,000 full and part-time employees. By the third quarter, that number rose 19% to 750,000 employees.

Amazon's hiring strategy includes heavy use of remote workers or flex jobs, including a program called CamperForce. The program was designed for nomadic people who live full or part-time in recreational vehicles. They help staff warehouses during peak retail seasons.

Amazon's leadership in remote jobs can be measured by FlexJobs, a site that specializes in connecting professionals to remote work. Amazon ranked sixth this year out of the 100 top companies with remote jobs. FlexJobs' rankings are based on data from some 51,000 firms. The volume of job ads determines ranking.

The influence of large employers

Amazon's use of remote work is influential, said Brie Reynolds, career development manager and coach at FlexJobs. There is "a lot of value in seeing a large, well-known company -- a successful company -- employing remote workers," she said.

In April, Amazon CEO Jeff Bezos challenged other retailers to raise their minimum wage to $15, which is what Amazon did in 2018. "Better yet, go to $16 and throw the gauntlet back at us," said Bezos, in his annual letter to shareholders.

But the impact of Amazon's wage increase also raises questions.

"Amazon is such a large employer that increases for Amazon's warehouse employees could easily have a large spillover effect raising wage norms among employers in similar industries and the same local area," said Michael Reich, a labor market expert and a professor of economics at the University of California at Berkeley. But without more data from Amazon and other companies in the warehouse sector, he said it's difficult to tell where the evidence falls.

Amazon HR's experience with AI in recruiting may also be influential, but as a warning.

The warning from Amazon

In late 2018, Reuters reported that Amazon HR developed an algorithm for hiring technical workers. But because of its training, the algorithm was recommending men over women. The technical workforce suffers from a large gender gap.

The Amazon experience "shows that all historical data contains an observable bias," said John Sumser, principal analyst at HRExaminer. "In the Amazon case, utilizing historical data perpetuated the historical norm -- a largely male technical workforce."

Any AI built on anything other than historical data runs the distinct risk of corrupting the culture of the client, Sumser said.

In July, Amazon said it would spend $700 million to upskill 100,000 U.S. workers through 2025. The training program amounts to about $1,000 a year per employee, which may be well less than Amazon HR's cost of hiring new employees.

They're not taking advantage of the opportunity to be a role model.
Josh BersinIndependent HR analyst

In late 2018, Amazon HR's talent acquisition team had more than 3,500 people. The company is interested in new HR tech and takes time to meet with vendors, said an Amazon recruiting official at the HR Technology Conference and Expo.

But Amazon, overall, doesn't say much about its HR practices and that may be tempering the company's influence, said Josh Bersin, an independent HR analyst.

Bersin doesn't believe the industry is following Amazon. And part of his belief is due to the company's Apple-like secrecy on internal operations, he said.

"I think people are interested in what they're doing, and they probably are doing some really good things," Bersin said. "But they're not taking advantage of the opportunity to be a role model."

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