Amazon to Employees: Please Quit!
Jul 29th 2012 6:10PM
Updated Jul 29th 2012 6:18PM
Amazon.com (NAS: AMZN) wants its warehouse employees to ditch their jobs. While that might seem to contradict the online giant's best interests, its new program could actually attract workers -- and fuel Amazon's plans to rule retail.
The company unveiled its Amazon Career Choice program July 23. For full-time hourly workers with three years' tenure, it will fund 95% of tuition and fees for accredited vocational training. Even if the chosen career has nothing to do with Amazon, the company will pay as much as $2,000 a year for four years.
Amazon says it'll pay up front for employees' schooling "in areas that are well-paying and in high demand according to sources like the U.S. Bureau of Labor Statistics," including health care, engineering, and construction.
Landing one of these new jobs could dramatically improve an employee's standard of living. According to the BLS, warehousing and storage workers earned $14 an hour and $29,120 a year on average in 2011. In contrast, construction workers brought home $21.46 an hour, and $44,630 a year.
A good deal -- if you can claim it
Amazon could use some good PR for its blue-collar jobs. In March, a Mother Jones article blasted the company's warehouses for mandatory overtime, impossible goals, and physically crippling tasks. In 2011, former shippers at one of Amazon's Pennsylvania facilities recounted working at a breakneck pace in 100-degree heat, only to lose their jobs if they fell short.
If such conditions persist, workers may not last the required three years. Nor does the program seem to apply to the many temporary workers who, Mother Jones reported, Amazon hires throughout the year.
Still, the job-training offer surpasses anything from Amazon's rivals. Target (NYS: TGT) offers tuition reimbursement, but only for "studies that are related to your current position." Wal-Mart (NYS: WMT) provides in-house management training for salaried employees who successfully apply for the program. And Costco's (NAS: COST) otherwise generous benefits don't seem to include any tuition or outside training.
More workers, please
As Amazon abandons its longtime sales tax war with states, it's shifting instead toward building more warehouses near urban centers, according to a Financial Times report. Closer shipping centers mean faster delivery, which will help Amazon gain customers and crush rivals. But more warehouses also require more employees.
Endlessly firing, hiring, and retraining workers will likely cost Amazon money and productivity. The company would no doubt prefer to keep the same workers for three years than three months. And if it can eventually send those workers off to higher-paying jobs, it'll expand the pool of potential Amazon shoppers.
Investors shouldn't expect a short-term payoff here; if it has any immediate effect, the program will likely narrow Amazon's already tiny margins. Like many of its strategies, the company's playing the long game.
To discover other ways that Amazon and one of its rivals are changing the face of retail -- and why that makes them great picks for your portfolio -- click on over to this special free report.
The article Amazon to Employees: Please Quit! originally appeared on Fool.com.Fool writing coach Nathan Alderman feels guilty every time he clicks "Free Super Saver Shipping." He owns shares of Amazon and Costco but holds no financial position in any other companies mentioned here The Motley Fool owns shares of Costco Wholesale and Amazon.com. Motley Fool newsletter services have recommended buying shares of Costco Wholesale and Amazon.com and creating a bull call spread position in Wal-Mart Stores. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.
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