Amazon prioritized finding 'wicked smart' college grads for management roles over promoting hourly workers within the ranks, according to a new report
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- Amazon kept hourly workers from getting promoted by seeking out new college grads to fill management roles, NYT reports.
- By comparison, Walmart reportedly promotes hourly workers at roughly double the rate of Amazon.
- Amazon has a minimum wage of $15 for all workers, a pay floor Walmart has not officially enacted.
- See more stories on Insider's business page.
Walmart - the country's largest private employer and Amazon's biggest competitor - promotes hourly employees to managers at roughly double the rate at Amazon, according to a new New York Times report.
More than 75% of managers at Walmart stores in the US began as hourly workers, the Times reported. Amazon, for example, last year promoted only about 220 of 5,000 employees at the JFK8 warehouse on Staten Island, according to the Times. It's part of a plan at Amazon to fill management roles with "wicked smart" college graduates, one former executive told the outlet.
David Niekerk, a former human resources vice president who stepped down in 2016, told The Times Amazon prevented hourly employees from achieving promotions by design, and said the firm's then-head of operations shot down a 2014 proposal to create more leadership roles for these workers.
The lengthy report examined how Amazon has kept business flowing amid a pandemic. One of the biggest revelations reported by the Times was how quickly Amazon burns through hourly employees, leaving some executives to fear that they may run out of new workers.
Before the pandemic, Amazon lost 3% of hourly workers each week, resulting in an annual turnover rate of 150%, according to documents reviewed by The Times.
In 2019, Walmart said its turnover rate for store employees is down 10% to the lowest level in five years. Across the industry, the National Retail Federation reported six out of every 10 employees has been promoted.
Amazon, which flourished during the COVID-19 pandemic as Americans spent more on e-commerce than in-store shopping, announced it would hire 75,000 people across US in Canada with a starting pay. of more than $17 and a signing bonus of up to $1,000. The retailer also increased pay by up to $3 an hour for 500,000 current workers.
The online retailer repeatedly touts their $15 minimum wage - a benchmark Walmart has not officially set for its workforce yet. In a Bloomberg article published late last year, an Amazon spokesperson brought attention to the fact Walmart has "yet to join" Amazon in raising its minimum wage to $15.
Jeff Bezos envisions Amazon as "Earth's best employer and Earth's safest place to work" in his final letter to shareholders as chief executive. Bezos wrote he will renew his commitment to helping reduce work-related injuries and increase employee satisfaction as Executive Chair.
"If we want to be Earth's Best Employer, we shouldn't settle for 94% of employees saying they would recommend Amazon to a friend as a place to work," Bezos wrote in April. "We have to aim for 100%."
Walmart and Amazon were not immediately available for comment.
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