Churn & Burn

Employee churn– It’s a solvable problem that costs American businesses $1 trillion a year. 

And last month, we found out what it was costing Amazon–  a whopping $8 billion, according to documents leaked to Engadget– almost a quarter of its profits.

According to these documents, Amazon workers at every level, from hourly warehouse employees to managers and leadership, are twice as likely to quit as they are to be fired—Only a third of those hired in 2021 have remained with the company.

According to a post from a former Amazon software engineer, lack of recognition was rampant during their tenure. They had seen how engineers “would kill themselves working every night, every weekend, coding, writing documents, and so on,” for “very little in return, if anything.” 

According to the former Amazon employee, praise was non-existent. As for promotions? If they were promised, they were withheld. Leadership “was actively coached on holding promotions as a carrot. ” According to the post, Amazon “burned out dozens of engineers” that way, all of them leaving “within a 1-2 month window of each other.” 

Now Amazon has responded to Engadget’s story, with Steve Kelly, an Amazon spokesperson, telling Forbes via email that, “We weren’t afforded the opportunity to review the draft documents cited in the Engadget article.”

Here are more of Kelly’s comments, from the statement provided to Forbes:

Basing articles on unverified documents—without knowing when they were written, if they were validated, or if they were later corrected – can be misleading, as is the case with the Engadget article.”

“Amazon has a rigorous document review process —oftentimes documents never make it past the draft stage, are rejected due to lack of reliable data, or are modified with corrected information,” Amazon said in a statement.

“After the Engadget article published, we believe we were able to identify all of the leaked documents in question and can confirm that none of them had been fully vetted or approved,” Amazon said.

Amazon’s statement to Forbes bears a striking similarity to the response they sent Engadget, first declining to answer specific comments about the documents, then refusing to confirm or deny any of the specific claims or figures, generalizing instead that internal documents were sometimes “rejected due to lack of reliable data,” without indicating whether such a rejection had taken place in this case.

Not as bad as the message Amazon sent to workers the day after a driver was mauled by a customer’s dogs and died– 

— But not great either. 

Regardless, our position remains the same: what gets rewarded gets repeated, and employees who get rewarded get retained.

But what seems self-evident to our team at 1Huddle is far from obvious to many employers. 

Companies and employees have struggled with rewards– companies with how to give them, employees with how to do without them– for years. 

Now, an amazing 82% of employees say they have never been thanked or rewarded by a boss or supervisor for their work.Of those who quit during the Great Resignation, 79% cited a lack of appreciation as their reason why. 

And as costly as disengaged workers are to keep—$450-$550 billion in lost productivity in the U.S. alone—they’re even more costly to replace. 

That cost can include payouts for accrued vacation time, unused sick days, and severance pay (not to mention fees related to recruiting and training their replacement) for a tab that can run from 50% to 200% of that employee’s annual salary.

Then, of course, there are the things that are harder to quantify, like knowledge loss and lowered morale—all of which are associated with additional monetary costs of their own.

As Robert C. Bird, a professor of business law and Eversource Energy Chair in Business Ethics at the University of Connecticut,  observed in his comments to Forbes, “Every employee that leaves Amazon takes with him or her valuable firm-specific human capital.” 

That includes knowledge and experience specific to Amazon, all of which  “will need to be retrained all over again when hiring replacement workers.” 

“Amazon will need to conduct some frank introspection in order to determine the underlying causes of the mass employee departures and consider how to restructure their workplace so that employees feel sufficiently valued,” Bird recommended.

Based on our experience, and empirical data, a quality learning and development program would be a good place to start. 

Not only would a proper workforce development program have the capacity to track its impact on those outcomes, but to increase retention, employee performance, and satisfaction– especially if it were to include self-directed, voluntary upskilling opportunities: “Those self-selected courses can tell you a lot about the workforce, including who has a passion for an in-demand skill that isn’t part of their current role.” 

Additionally, it would  have the capacity to coach and reward workers;  making “current employees feel valued and optimistic” while also attracting “new workers from a restless and growing talent pool.”

Somehow, Amazon has managed to invest millions in one that does neither. 

If reporting from Engadget is to be believed, there are “considerable issues within Amazon’s vast learning and development complex, some 97 programs and 2,000 learning modules of which are overseen by the Consumer Talent Strategy, Management and Development (CTSMD) team.” 

Worse, beyond the program’s $90 million budget, managers and workers at every level have wasted on average 113 hours of their time each year on training where the definition of “completion” for a learning module is “simply clicking through to the end of the course.” 

That’s no way to learn anything– and it’s no way to make an employee feel appreciated. 

At 1Huddle, we see this all the time. Amazon’s story is like that of many American companies during these past few years. They’re confronting similar problems around retention that many smaller organizations are facing and making many of the same mistakes– only on a much larger scale. 

With Thanksgiving around the corner, Amazon should consider showing the workers who’ve remained just how grateful they are. Maybe by giving them the gift of a new learning and development program? One that, at the very least, tracks and rewards their efforts?

About 1Huddle

1Huddle is a coaching and development platform that uses quick-burst mobile games to more quickly and effectively educate, elevate, and energize your workforce — from frontline to full-time.

With a mobile-first approach to preparing the modern worker, a mobile library of 3,000+ quick-burst employee skill games, an on-demand game marketplace that covers 16 unique workforce skill areas, and the option for personalized content, 1Huddle is changing the way organizations think about their training – from a one-time boring onboarding experience to a continuous motivational tool. 

Key clients include Loews Hotels, Novartis, Madison Square Garden, PIMCO, TAO Group, and the United States Air Force. To learn more about 1Huddle and its platform, please visit 1huddle.co.