A companies success in large part is determined by the quality of the people hired and quality employees that stay on at an organization even when they have opportunity elsewhere. This memo will look into current and proposed ways of hiring, information around hiring practices, and deliver ways to more effectively retain and keep the best talent for Amazon. The current way most HR departments handle hiring practices leads to a Day 2 organization. Currently top talent is hunted after for what they have already done in the workforce with the thought that if someone was successful in a similar role at another organization they will be successful at Amazon. Currently Amazon has thousands of empty positions for skilled workers. This number will grow as the demand and the unavailability of skilled resources increases particularly in highly technical positions. For most companies, including Amazon this means spending money on head hunters and other technical recruiting outfits to secure employees, both full time and contract workers. Fundamental to any human relationship is trust, if you can’t trust someone, it's hard to have a long term relationship with that person, contract work by its very nature leads to a low trust relationship. Top talent would want to avoid contract positions due to the lack of guaranteed long term job status and not having full benefits. I myself have turned down contract positions with Amazon and elsewhere since they were not full time opportunities like other positions that I was offered at the time.
The current process of recruiting and hiring employees cost companies in the US hundreds of billions of dollars a year. In terms of time it can take on average 2 months to find a new hire and then depending on the job a month or year to train them. Median Tenure though is only 5 years. With the trend for median tenure being starkly less in the high tech sector. With companies like Facebook seeing median tenure at 2.5 years and Netflix at 3.1 years and Uber at 1.8 years. (https://www.businessinsider.com/average-employee-tenure-retention-at-top...) So if it costs a lot of money to hire new employees and Amazon is in a sector that has low median tenure we need to think of ways to become a Day One organization and chart a better path forward than the current trend.
The current trend is to hire someone who has already done the job we are looking for 5 to 10 years at other companies, also ignores the very real fact that each and every company is different, has different company cultures, different markets and unique value propositions, and often deploys different technologies. Most IT departments deploy around 75 different software programs and have numerous hardware vendors. While one person might be able to code in language x the company they are interviewing could be writing code in language y, they could be use to Cisco and VMWare, but the company they are interviewing for use Juniper and HyperV. While having done something similar at another company hopefully will decrease on-boarding time, there will always be on-boarding time for a new hire at a new company.
On-boarding new employees is an expensive process and the challenge for companies in the future will be maintaining the highest quality workforce they can. Workers today are more likely than ever to move on when they feel there is no room to grow in the current position and company. A company can try deploying golden handcuffs in the hopes that their talent doesn’t leave. Some examples of these are yearly or biannual bonuses, increased PTO, increased benefits over time working with a company like profit sharing. All of these act similar to a fraternity pledge, basically I have put up with so much to earn what I have, it must be worthwhile and if I go someplace else I would have to build up longevity at that company to succeed there and acquire similar benefits
A person’s work ethic can be affected by a lot of different things, however, in general, someone who will work hard at one task as long as they care about another task will also work hard at the other task. Large organizations like Amazon have the benefit of being able to move people around to different positions within the company once they have identified that the person has a strong work ethic and possesses the attitude and character traits Amazon is looking for. Also there is a reduced training time for an Amazonian being transferred from one job role to another as they are familiar with the culture, and also already have any HR training done.
In the future, I believe it will be more successful to hire for character than specific job skills. Training skills and growing employees and then working with them through their career leads to employees who will want to stay with Amazon since they know they can grow with Amazon and they know Amazon is interested in that growth. This helps build a high trust relationship were employees trust Amazon to be a place that cares about their long term career goals and they know that HR will work with them to achieve their career goals. Trust is the cornerstone of relationships, and by actively caring for your employees careers you build trust by showing that you care for your workers long term career path.
In comparison, workers today in the current job market will move on once a headhunter reaches out to them with a better paying position at another company. If the only thing you have to keep your talent where they are at is money than someone else will always pay more money. For a company to be successful you need to build a place of employment that the money not only shows you care, but the culture and work has purpose and the employee would rather be paid less at Amazon and have more meaningful work than make more money elsewhere. As Steve Jobs famously said to John Sculley, “Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?”
High turnover and a talent shortfall leads to incredibly high costs to keep and maintain a talented workforce. It is also part of the reason why there are so many empty positions at Amazon, because the current job search system and how HR handles employment engagement and job growth is handled in the way of a Day 2 Organization. Although impossible to put a firm number on how much disengagement costs companies some calculations have the number at around $550 billion dollars a year. Employee satisfaction at jobs is at an all time low. Only 45% of surveyed respondents are satisfied with their jobs, down from 61.1% in 1987 according to banknews.com. (https://www.banknews.com/blog/u-s-job-satisfaction-at-lowest-level-in-tw...) There are many reasons that an employee can be unsatisfied at work, however, all of them lead to lower productivity which hurts the bottom line.
The current paradigm of recruiting is around a horse and cart predicament, that to have all the check-boxes needed for the current position you have to have done the position someplace else before hiring on at Amazon. If you are always looking at the past when searching for talent you miss the future, part of leadership and developing a workforce is seeing talent and building on that talent. Stephen Covey author of the Seven Habits of Highly Effective People is quoted saying, “Leadership is affirming people’s worth and potential so clearly that they are inspired to see it in themselves.” Also just because someone has done something in the past doesn’t mean there motivated to do the same thing in the future, job satisfaction ratings show that there are a lot of unhappy people that continue to work in roles even though they don’t find joy in them.
Finding and building talent can be a hard thing and there are not a lot of great real life stories I know of this. One example is that John Maxwell mentored and has Mark Cole lead his organizations for him. When Mark Cole had the opportunity to coach the company baseball team people above him in the organization saw leadership potential in him. Mark Cole I believe also had the ability to present solutions to problems, listening to Mark Cole speak on a podcast he said that he would always present three different solutions to John when there was a problem. Mark Cole was able to grow from an entry level sales position because people saw potential in him. Another example, is Beth Galetti who’s passion for people development lead Amazon to put her in charge of HR eventually even though when she didn’t work in HR before starting on at Amazon. Hiring for passion and talent allows you to see someone who would be a great fit for a position even if they haven’t done that in the past.
The way that a company treats employees can also have a direct correlation with consumers wanting to shop at that business. There have been many studies and stories of people who won’t shop at Walmart because of how they treat their workers.
According to a 2016 Compensation Force study, the average total turnover for all industries is 17.8 percent. To help reduce employee turnover HR should take an active role in career development of individuals. HR should seek to understand what employees career goals are and then as positions and opportunities at Amazon become available to fill those positions with interested individuals. For new hires this will mean biannual meetings with HR for the first three years and then annually afterwards to discuss career goals and career progress. I believe in person conversations for the first three years would allow for added value conversations that would prove valuable for career success. After three years I would think this could be facilitated in a more automated none face to face manner. This also should be part of the hiring process, if an individual is being hired for a role they have done in the past, but they want to grow into a new role it is best to know and plan for this as soon as we bring a new hire onboard. This is in comparison to the current industry practice of once someone is onboard hope they stay there forever satisfied. Job growth if preferred almost requires in the current paradigm for a worker to leave a company and look for growth elsewhere. Although it can seem in the short term financially beneficial to keep an employee in a lower paying job when they want to grow into a different role that pays better the individual will eventually leave a company if job growth is not present. This leads to higher employee turnover and greater costs in the long run for organizations and losing promising talent.
To value someone you need to pay them in a manner that they feel like their work matters and that you are paying them a fair amount for the work they are doing. You also need to ensure some way for salary increases as their career progresses hopefully outside of a flat COLA increase every year. No one likes the idea of making the same or less money than they made four years ago. Although pay can be a reason an employee would leave a position for another one, most happy employees are not going to quit their jobs and do the same thing elsewhere without a significant pay increase for example 20% to 25% more than they are currently making.
Mentoring and helping partner individuals with resources to help them grow in their careers will be a part of successful organizations in the future as the competition for the best talent becomes even more critical for long-term success of Day 1 organizations. There has also been a lot of studies that show the many benefits one gains from having a broad skill set to build upon. David Epstein author of Range: Why Generalists Triumph in a Specialized World , and of the top 10 New York Times bestseller The Sports Gene, which has been translated into 21 languages, makes the case for the benefits of generalization. The ability to quickly learn and adapt and take on new challenges will be even more relevant as new and changing jobs require the ability to learn new skill sets. With studies showing a large percentage of the jobs of the future haven't been invented yet. You also will know more of how Amazon functions outside of just your job role so when interacting with other departments you have a better idea of how to provide them with value and help them achieve better customer satisfaction.
Wayne Gretzky said, “I skate to where the puck is going, not where it has been.” The implication of forward thinking is absent of the current paradigm of technical recruiting. If you hire someone for a position that they will not enjoy in three years or find out that the company they hired into doesn’t care about your long term prosperity do you think employees will want to stay with those employers? In hiring based off niche job roles that people have had at other companies instead of hiring for character and training long-term success at amazon we show a day 2 mindset of thinking about today, but not tomorrow. I know in the past when Amazon talent scouts have reached out to me it’s always for what I have done in the past and for a position that is basically what I have done elsewhere, but now the recruiter would like me to do at Amazon. There has been no looking for where the puck is going, just where it has been. The mindset needs to change to where will this person’s talents and skills bring Amazon tomorrow, not what has this individual done in the past. When someone is excited for the future why would you want to be held up with the past?
Stagnation can happen in any role and practices should be put in place to encourage growth and job success not just for what you are doing now, but for what you will be doing in two to five years as well. I have known coworkers who definitely get burnt out in the technology sector, they although have the talent and check-boxes that today’s recruiters search for, don’t have the more important desire to want to do the work, they just show up and work because this is the box they have been painted into. Are current paradigm of tech talent searching doesn’t take into factors that really matter like what does someone want to be doing and how do we help them fulfill their career goals at Amazon?
With a tighter job market and growing shortage of technology workers, it’s time to ask if the old way is still relevant? The long term solution is to hire for character, listen to your employees as they discuss their job interests and career goals, grow with your employees, and lead the way in, Day 1 thinking of how to hire and maintain a skilled employee resource pool.
With the explosion of the internet and the increase in resumes that are sent for job openings, automatic ways to reduce the noise do occur, but even with the technology and money spent on recruitment, companies don’t see higher longevity and employment satisfaction ratings than we did 40 years ago. So if more technology hasn’t resolved the issue then what will? The following are some ideas that I think would be helpful.
First off when you glance at a new hire look for signs of character. With the increase of resumes that get submitted for a position hiring managers are spending less time overall looking at potential employees. Character though is hard to spot on traditional resumes. When you see signs of a potential candidate with strong character traits spend the time to follow up with a phone call asking open ended questions to judge the person’s character.
Second actually practice long term thinking when it comes to hiring decisions, do we just want someone to fulfill a current position or do we want to hire a rock star performer that is going to grow and develop during their time at Amazon? Use are passion for invention on building an atmosphere of growth where employees feel challenged and valued.
Be up front about negatives. If there are negatives about the position and company it is best to state those up front instead of waiting for a new hire to figure them out in a year and come to the conclusion that those negative qualities are a reason for them to move on. For example, a new hire should know what the expected hours for a salaried employee are, if there's a burnout culture like at Tesla where you are expected to work 100 hours a week that should be something well communicated before an employee starts on Day 1. While these company culture aspects that might be considered negative should be known by HR, its harder to spot these issues when their specific to a department like lack of vision or a manager that is very unpleasant to work for.
Some more common sense considerations include “Providing a stimulating workplace environment, which fosters happy, motivated and empowered individuals, lowers employee turnover and absentee rates. Promoting a work environment that fosters personal and professional growth promotes harmony and encouragement on all levels, so the effects are felt company wide.” (https://en.wikipedia.org/wiki/Turnover_(employment)#Prevention)
Hire for passion. The old proverb is do what you love and you will never work a day in your life. Human beings at are core seek significance and want the work they do to be more than just earning a paycheck to pay their bills. When you hire someone who is passionate and really enjoys and cares about the work they are doing the amount of work and quality of the work they do will improve. The opposite of this is hiring people who although our skilled in a subject really don’t care for it and would rather be doing something else, but they feel like their special skill is the only thing that people will pay them money for.
Educated workers know the importance of judging people not by their words alone, but by their actions. There have been numerous posts and information already about the importance for hiring for character. Elon Musk, founder of SpaceX spoke at the South by Southwest conference where he said, “[My biggest mistake is] weighing too much on someone’s talent and not someone’s personality…it matters whether someone has a good heart.” Sir Richard Branson, billionaire mogul of Virgin Group wrote, “If you can find people who are fun, friendly, caring and love helping others you are onto a winner.” He went on to say “Personality is the key.”
There are several benefits for Amazon for moving from a culture that we do what everyone else does to focusing on hiring and developing talent and character. We should expect to see higher tenure ratings, increased employee job satisfaction and increased job performance. We will be able to reduce talent shortfall by training and providing an atmosphere of growth, creating a pipeline of employees who are more loyal and appreciative of the atmosphere of growth that Amazon could be known for. We will also see reduced cost per hire, increased employee longevity, more productive employees, reduced costs associated with hiring and retention.
As a company that strives to be a Day 1 organization now that we can see the current way of doing things is ineffective and that the importance of hiring for character and passion is really critical in the future, we need to start thinking of how do we get to that future? As a six page memo there is no way all the answers will be here, but I have put together a few paragraphs on some places that offer a good start to the task of making our actions reflect our words.
We need to understand the importance of gratitude and how creating opportunities that are uncommon can build gratitude. There have been many historical examples of gratitude like George Washington setting aside Thanksgiving as a holiday or other examples by other presidents. (https://gerardnadal.com/2010/11/25/a-history-of-gratitude/) When Amazon goes beyond and above for their customers not only do you build loyalty you also build gratitude. Gratitude and loyalty should be observed by going above the call to provide an atmosphere of growth where Amazon’s employees can live out their passions every day.
People are more than their past. We need to listen to future employees and show that we care about their future, not just what they have done in the past. No two situations in life are the same and just because someone has done something in the past does not mean that they or the strategy they employed in the past will be successful in the future. Ron Johnson is famous for rolling out the Apple Store and creating a shopping destination experience unlike any other, however, he was not successful with revitalizing JCPenney. A current recruiter might have thought Ron Johnson to be the perfect person to turn around JCPenny, but it takes more than just checking all the boxes that an algorithm is searching for to do what has never been done before.
We will need to learn the importance of setting people up for success and growing with are employees in doing what has never been done before. If a company wants to be a Day 1 organization it has to think differently, and start asking questions that have never been asked before to find answers that no one has come up with yet. With momentum and enough people on the same page humans in the past have done what has been described as impossible like flying and going to the moon. In the future, as we look to change how we hire, we will need to focus on setting people up for success. As our employees grow we need to learn to grow with them.
I have seen a lot of people and companies where people are set up for failure. Like making an introvert spend all their day socializing with other people or not providing adequate training to a new hire. Micromanaging and not trusting employees.
“If a job lacks growth opportunities and avenues for leadership development, 67% of millennials would leave that position. Offering career training and development would keep 86% of millennials from leaving their current position.” (Bridge)
Although I don’t know all the ways now that current hiring practices today will change, I am hopeful they will. As I get bombarded with recruiters who only look at the past and companies who don’t seem to value their human workforce seems to be on the rise, I feel that the current methodologies that are used for hiring talent is not sustainable. Specifically with the increasing demand for tech talent over the next several decades is expected to rise and there is already so many vacant openings at organizations like Amazon I think that Day 1 thinking is going to have to be employed to solve the talent gap in the workforce of tomorrow.
I am confident that by focusing on hiring for character over checkboxes and focusing on career development that we will see see higher tenure ratings, increased employee job satisfaction and increased job performance. We will be able to reduce talent shortfall by training and providing an atmosphere of growth, creating a pipeline of employees who are more loyal and appreciative of the atmosphere of growth that Amazon could be known for. Then we will move from the current Day 2 hiring practices that plague organizations to Day 1 thinking that Amazon is famous for.
Research Links
https://www.quora.com/How-much-is-spent-on-corporate-recruiting-in-the-U...
https://www.resumetoreferral.com/headhunters/
https://hundred5.com/blog/cost-of-hiring-an-employee
https://www.youtube.com/watch?v=iXBhINPoKEk
https://thebossmagazine.com/hiring-character/
https://www.smartrecruiters.com/blog/how-5-ceos-hire-for-character/
https://www.linkedin.com/pulse/20141020200040-5888060-stop-hiring-for-at...
https://www.asppa.org/sites/asppa.org/files/Comm_2016/WBLF_Session2.pdf
https://www.nytimes.com/guides/business/how-to-hire-the-right-person
https://www.jstor.org/stable/41841531?seq=1
https://www.ebri.org/docs/default-source/ebri-issue-brief/ebri_ib_474_te...
https://www.forbes.com/sites/nazbeheshti/2019/01/16/10-timely-statistics...
https://blog.accessperks.com/2018-employee-engagement-loyalty-statistics
https://www.shrm.org/hr-today/trends-and-forecasting/research-and-survey...
https://www.fastcompany.com/90325624/yes-amazon-has-an-hr-chief-meet-bet...
https://www.opnlttr.com/letter/open-letter-jeff-bezos-contract-worker%E2...
Bibliography
Craig Copeland. “Trends in Employee Tenure, 1983–2018.” EBRIIssue Brief, no. 474(Employee Benefit Research Institute, February 28, 2019).
