High Employee Turnover At Amazon: Causes And Recommendations

Overview of Amazon

Human resource management can be defined as a strategic approach for the purpose of ensuring effective management of the workers of the organization so that they can effectively contribute towards the attainment of competitive advantage. The role of the HR department is concerned with maximizing the employee performance while servicing the strategic objective of the employer. The overall purpose of human resources is to ensure the capability of organization to achieve success through people. The human capital of an organization is managed by HR professionals who also perform the function of implementing policies and processes (Armstrong & Taylor, 2014).

On the other hand, human resource issues results in slowing down the productivity, reducing employee morale along with preventing the business from planning its expansion. It is the task of the HR department to deal with the compliance issues and employees requests on everyday basis in an effective manner along with completing the rest of their tasks.  Sometimes, certain regulations and procedures are overlooked by the HR department which leads to HR issues at a later date. However, there are several ways for addressing the common HR problems such as streamlining some of the common tasks and improving the efficiency of the HR department (Bratton & Gold, 2017).

This report is focused on Amazon which is facing the HR issue/ problem of high employee turnover along with the causes and recommendations for addressing such causes. An implementation action plan has also been provided for each recommendation. The study conducted for this report will provide assistance in its practical implementation.

Amazon.com Inc. is an electronic commerce and cloud computing company of America based in Seattle, Washington. The company was founded in the year 1994 by Jeff Bezos. With the passage of time, Amazon has become the world’s largest internet retailer. There are separate retail website of Amazon for United Kingdom, United States, Spain, Italy, Canada, Germany, France, Ireland, Japan, Brazil, Netherlands, China, Australia, Mexico and India.  International shipping is also offered by Amazon for some of its products to specific other countries. A large range of products are offered on amazon.com which first started as an online bookstore and later opted for diversification for selling video and MP3 downloads/ streaming, video games, software, furniture, apparel, electronics, jewelry, food and toys. Consumer electronics are also produced by the company such as Fire tablets, Kindle e- readers, Fire TV and Echo which has made it the largest cloud infrastructure services provider in the world (Amazon, 2018).

High Employee Turnover at Amazon

The total number of employees of Amazon is 566,000 as per the report of the year 2017.  Moreover, hierarchical organizational structure has been adopted in Amazon. The reason behind the development of hierarchical structure is the immense size of its business. There are three Senior Vice Presidents, two CEOs and one Worldwide Controller who perform the assigned responsibility regarding the various aspects of business and report directly to Amazon CEO Jeff Bezos (Amazon, 2018).

The HR related problem faced by Amazon is high employee turnover which results in a severe impact on its business. Employee turnover can be defined as the number of employees replaced as a result of resignations or other separation within a defined period. It is expressed in terms of employee turnover rate which is percentage of leaving employees. The measurement of employee turnover is usually made in a month (Terera & Ngirande, 2014). Moreover, a number of costs are associated with the replacement of the lost employees thereby making it expensive for the organization. It requires locating and screening potential new hires, conducting interviews and completing the necessary paperwork and reference checks. After selecting and hiring the applicant, they are also required to be provided training and orientation along with making them aware regarding the policies and procedures of the business. Low productivity is faced by the business till the time new employees become familiar with their respective duties. Along with this, the company is also required to pay the costs of employee turnover in the form of productivity, money and time (Al Mamun & Hasan, 2017).   

Amazon is considered among the top companies which face the problem of high employee turnover. Over the past 15 years, Amazon has brought a big transformation in the retail industry. However, this big change has been possible only with the help of workforce comprising of talented software engineers. The competitors of Amazon are engaged in continuously wooing the employees of Amazon as their demand exceeds supply. Moreover, a number of new jobs have been introduced in the company due to its rapid growth in the past few years. This also comprises a reason for the typical Amazon employee to be with the company only for a year (Marchington, Wilkinson, Donnelly & Kynighou, 2016).

However, there are observable and measurable symptoms of high employee turnover as it is a big HR related problem. One of the observable symptoms is increased absenteeism of the employees. When the employee turnover is high, the posts remain vacant for most of the period. When the employees spend most of their time in such an environment, they develop negative image about the company. Also, the employees who have the intention of leaving the organization encourage other employees to leave along with them due to lack of future opportunities in the company (Sonnenstuhl & Trice, 2018). When such a scenario exists in an organization the behavior of the employees are changed which is visible in the performance of the tasks.  They also lose their interest in making efforts for the achievement of organizational objectives. Therefore, the behavior of the employees should be noticed from time to time as it is a symptom which is noticeable before the occurrence of the problem of employee turnover. Also, it can be observed that there is requirement to recruit new employees in the organization. This is due to the obvious reason of vacant posts (Boswell, Gardner & Wang, 2017).    

Observable and Measurable Symptoms of High Employee Turnover

The measurable symptoms of employee turnover include the reduced productivity of employees due to their view of changing the organization in the near future. This can be measured in due time so that an organization can take action regarding changing the views of employees. When the productivity levels of the employees fall, there is an immediate decline in the productivity of the organization. Low productivity often reduces the profitability of the business over a period of time. However, Amazon never suffers from significant losses and has been able to attain the position of the world’s largest internet retailer (Kantor & Streitfeld, 2015).

The problem of high employee turnover is not the ultimate result of single cause. There are a number of potential causes of the problem of employee turnover. The causes of high turnover are associated with the same factors that contribute towards the absenteeism of employees. In other words, if the workers lose their interest in their jobs, they either leave or stay away. There are a number of other reasons than just being unhappy in a job. If the skills possessed by the employees of an organization are in demand, they may be attracted by the competitors by offering higher pay, better job growth potential or better benefits (Reiche, Stahl, Mendenhall & Oddou, 2016). As far as Amazon is concerned, there are a number of reasons for the employees to switch to other organizations such as longer working hours, no room for the relaxation of employees, etc. Also, the employees get negative energies from the employees due to which they like to switch to other companies. However, despite of this, steps can be taken for the purpose of retaining the workforce by improving their morale along with making them happy and productive. Nothing can be done of the competitors who will continuously make efforts by making their internal working more competitive by increasing the pay and benefits from time to time (Hom, Lee, Shaw & Hausknecht, 2017).

Following are the potential causes of the existence of high employee turnover in Amazon.

The workforce of Amazon comprise of talented software engineers who are required to be updated regarding the latest technology such that the company can outperform the competitors. Sometimes, the employees are unable to cope up with the latest technology due to which they find their jobs difficult. In other words, the employees who are given the responsibility of performing a job that is difficult for them, due to any reason such as lack of competence or due to underutilization of skills, may lead them towards quitting the organization. Lack of training can also be the reason behind the inability of the employees to perform the tasks in an effective manner. When the employers have inadequate information regarding the skill requirements for the fulfillment of a job position, overqualified or under skilled workers are hired (Goldstein, Pulakos, Passmore & Semedo, 2017).

Causes of High Employee Turnover

This can be linked to the HR model of David Ulrich which is based on four key HR roles such as HR business partner, administration expert, change agent and employee advocate. The business partner role of HR provides that the HR is required to identify the top talents and should influence the organization in a positive manner. Those employees should be selected who are suitable for the team along with supporting diversity. The next role of an HR is of a change agent where he bears the responsibility of communicating the changes along with gaining the trust of the employees (Paillé, Raineri & Valeau, 2015). The basic purpose of HR during the performance of this role is to prepare the employees so that they can effectively perform their duties in the new organization. When changes will be introduced in Amazon in a positive manner, it will be easier for the employees to cope up with it and they will not resign from their jobs. As an employee advocate, the HR is required to provide an equal and fair chance to employees to apply for new roles in the organization. They should also take training and development sessions for the employees so that they can learn the duties to be performed in an effective manner. As an administration expert, the HR needs to administer the activities for finding the gaps (Dhar, 2015).      

Another potential cause of high employee turnover in Amazon is the feelings of not being appreciated among the employees. Workplace appreciation has its own psychological effects on the performance of the employees. When an employee gets appreciated in an organization, the performance and engagement automatically gets boosted along with the health and well- being of the employees. Employee recognition is also associated with appreciation which motivates the employees to perform better in their jobs.  In an organization, where an employee does not get recognized or appreciated for the hard work done, high employee turnover is generally noticed. Therefore, it can be the potential cause of this problem (Qazi, Khalid & Shafique, 2015).

This is can be linked to the expectancy theory of motivation that the behavior of employees is dependent on the outcomes. The expectancy theory is dependent on three elements namely expectancy, instrumentality and valence. Therefore, the HR should set the goals for employees and when they are achieved by the employees, expected rewards should be given in the form of bonuses, incentives, pay rises, recognition and appreciation. The employees should be recognized in the form of ‘employee of the month’ rewards so that other employees also work harder in order to get recognized (Deery & Jago, 2015).    

Recommendations for Addressing High Employee Turnover

Since Amazon is a large organization, the employees are also highly qualified having experience for a number of years. Such highly experienced employees are not satisfied when they work for low salaries. They can easily get a better job at any other organization for the experience they have. Moreover, if the employees having similar qualification and experience are given better pay in the same organization than the previously employed employees, then it leads to dissatisfaction (Kossivi, Xu & Kalgora, 2016).

For this, the HR should apply equity theory in the organization, which is based on the principle that the motivations and actions of people are dependent on fairness. In cases, where inequities are perceived by the employees in the workplace with regard to salaries or any other factor, they seek to reduce it by way of falsifying the inputs or results in their own minds or by leaving the organization. Therefore, the HR should ensure that similar experience and degree gets similar pay in the organization so that there are no discrepancies on a later date (Cho, Rutherford, Friend, Hamwi & Park, 2017).   

The identified causes can be addressed in an effective manner by considering the following recommendations.

It is recommended that the HR manager should carefully assess and study the requirements of a specific job in terms of skills and qualification before selecting a candidate for a particular post. Moreover, instead of simply believing the documents, the workers should also be tested for the requisite qualifications. Some tests can be conducted so that the knowledge implementation skills of the employees can be assessed. The use of job descriptions and job analyses can also be made for minimizing the chances of occurrence of such circumstances (Ogbonnaya, Daniels, Connolly, van Veldhoven & Nielsen, 2016). Moreover, after the selection of the candidates in Amazon, requisite training should be provided so that the candidates can learn the actual requirement of the job. At the initial stage of the job, when the employee is unaware of the duties, responsibilities and the work to be done, there are chances that the employee leaves the organization. This is due to the fact that the employee is not getting the needed assistance for fulfilling the tasks to be done. If proper training is given, the skills of the employees can be enhanced and they can perform the jobs effectively (Collings, Wood & Szamosi, 2018).

The problem of non- appreciation among the employees can be addressed by initiating ‘employee of the month’ and ‘employee of the year’ programs so that the employees get the needed recognition and appreciation for their hard work. (Lu, Lu, Gursoy & Neale, 2016) Certain motivation sessions can be conducted in the organization from time to time where the employees get an opportunity to interact with the motivational speakers. The motivational speakers can psychologically motivate the employees and can even enhance the performance of those who are not able to perform up to the mark. Moreover, when there is even a small improvement in the performance of an employee, it should be communicated formally in the entire organization so as to provide them recognition and appreciation (Avis, 2018). Furthermore, a reward program can be designed for the employees for the purpose of appreciating the performance of the individuals and their team. The reward program can be of any type such as variable pay, bonuses, profit- sharing, etc. Also, an extra effort can also be made by the organization by way of introducing recognition programs which, in turn, will provide returns to the organization in the form of employee performance. Recognition is required to occur at timely basis when the performance is fresh in the mind of the entire company. If there is a constant record of high performance, recognition should also be frequent. It can take any form such as structured programs which include regular recognition events or informal or spontaneous recognition (Aruna & Anitha, 2015).         

Conclusion

For the purpose of addressing the problem of substandard or unequal wage structure, it is recommended that Amazon should not make any differences in the pay of the employees if the experience and qualification of the candidate is similar. The difference should be made only on the bonuses, incentives and extra benefits offered on the basis of the performance of the employees (Ko & Hur, 2014). High employee turnover can be reduced by offering the desirable benefits, pay, job security, opportunity for advancement/ growth along with pleasant work conditions to the employees. Moreover, no inequalities should persist in the organization which can lead to this issue. Job perks should also be offered such as flexible hours which also appears to as a benefit to the employees. Sometimes this becomes a factor due to which the employees do not leave a job. Also, if due to some reason, there are some differences in the pay of the employees, they can be ignored if the company offers great opportunities for growth to an individual (Al- Emadi, Schwabenland & Wei, 2015).  

Employee turnover can be effectively addressed if an organization plans for the retention of the employees. The primary condition for planning for employee retention is finding out the reasons or causes for employee turnover. These causes have been identified in the previous part of this report. The three main causes of employee turnover are bad match between the skills of employees and their respective jobs, non- appreciation for the hard work of the employees, substandard or unequal wage structure. Some recommendations have also been offered in this report for the addressing these causes of high employee turnover. However, the actual implementation of these recommendations is a difficult task.  Therefore, a change program has been designed in this part of the report for Amazon which includes a set of activities and procedures which should be considered for the purpose of reducing the high employee turnover (Brewster, Chung & Sparrow, 2016).

S. No.	Particulars	Who	When	How
1.	Hiring Process	HR Manager	Week 1 – 2	HR Manager in consultation with the manager will short- list candidates who are expected to fit into the culture of the organization.
2.	Conducting tests	HR Manager	Week 2  – 4	Tests will judge the knowledge implementation skills of the candidates.
3.	Training	Manager	Week 4 – 6	The selected candidates will be offered training before assigning them respective duties.
4.	Training for updating knowledge of Existing Employees	Manager	Week 6 – 8	New technologies and changes introduced in the workplace will be taught to the existing employees for updating their knowledge.

The above action plan provides for the implementation of the recommendations for the cause A of high employee turnover. The implementation of the recommendations will start with the hiring process. The HR Manager will short- list the candidates that meet the requirements of the position. The candidates will then be interviewed and potential employees will be identified on the basis of their ability to fit into the culture of the company (Mathieu, Fabi, Lacoursière & Raymond, 2016). Then the tests will be conducted before offering them the offer letter in order to judge their knowledge implementation skills under various circumstances. After this, they will be hired in the organization and will be provided the requisite training for the purpose of providing knowledge regarding the tasks to done. Along with this, the manager will also ensure that training is providing to the existing employees as well so that their knowledge does not become outdates and they achieve the competency of completing technical tasks as well (Bradler, Dur, Neckermann & Non, 2016). Training will consider the long term plan of the Amazon by improving productivity along with profitability.   

S. No.	Particulars	Who	When	How
1.	Recognize Good Work	Manager	At the end of the month and year	Good work should be recognized by praising the employee at the monthly and annual meetings. Cash bonus or other benefits can be offered for exceptional performance (Zablah, Carlson, Donavan, Maxham III, & Brown, 2016).
2.	Reward Failure	Manager	At the end of the month and year	The employees who are showing stagnation in their performance should be praised for their efforts along with motivating them for performing better.

The implementation plan for the recommendations of Cause B provides that the good work done by the employees should not be taken for granted otherwise it will result in losing the talent. The plan should be implemented by providing recognition to them in monthly and annual meetings. They should also be provided appraisals along with cash bonuses and other benefits. Moreover, the employees who were not able to perform well will also be rewarded for their efforts so that they do not lose hope and make their best efforts for performing better (Barrows, 2017).

S. No.	Particulars	Who	When	How
1.	Providing Career Path	Top Management	At the time of annual appraisals	Promotions are the biggest motivators for the employees. They should be promoted to next position on annual basis.
2.	Benefits Package	Top Management	At the time of annual appraisals	Employees will be given an option of flexible working hours. They will be provided incentives for working hard.

The implementation of the recommendation for Cause C provides that the top management will provide career path to the employees by promoting them to higher positions on annual basis according to their performance. This will also lead to hike in their salaries which will motivate the employees. Moreover, benefits package will be offered to the employees when they will complete one year at the organization. A number of benefits will be included in such benefits package such as allowance of flexible working hours, increments and incentives for working hard (Mai, Ellis, Christian & Porter, 2016).

When all the three plans will be implemented in Amazon for the purpose of redressing the problem of high turnover, there will be a great change in the organization. The productivity of the employees of Amazon will also improve when they will feel that the top management is concerned regarding their needs. In this way, they will work harder for performing better for the achievement of the organizational and individual objectives. Therefore, these implementation plan will consider the short and long term plans and will ultimately help Amazon in resolving the problem of high employee turnover (Brashear- Alejandro, Kang & Groza, 2016).  

Conclusion:

Therefore, it can be concluded that human resource management is a strategic approach for the purpose of ensuring effective management of the workers of the organization so that they can effectively contribute towards the attainment of competitive advantage. Human resource issues results in slowing down the productivity, reducing employee morale along with preventing the business from planning its expansion. This report focused on Amazon which is facing the HR issue/ problem of high employee turnover along with the causes and recommendations for addressing such causes. An implementation action plan has also been provided for each recommendation. Amazon.com Inc. is an electronic commerce and cloud computing company of America based in Seattle, Washington. The three main causes of employee turnover identified in this report are bad match between the skills of employees and their respective jobs, non- appreciation for the hard work of the employees, substandard or unequal wage structure. The recommendations for addressing these causes include paying special attention during the hiring process, introducing employee reward and benefit programs. A change program has been designed in the later part of the report for Amazon which includes a set of activities and procedures which should be considered for the purpose of reducing the high employee turnover. HR manager, manager and the top management will be responsible for the actual implementation of the action plan.

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