Amazon.com is looking to give itself an employment advantage as the U.S. unemployment rate hovers near a record low and skilled workers are getting harder to come by.
The Seattle-based giant unveiled plans Thursday to retrain around a third of its workforce by 2025 at a cost of around $700 million as retailers battle it out for workers and technology reshapes traditional retail jobs.
Per Amazon’s surprise announcement, the 100,000 workers will have access to a plethora of programs to help them move into highly skilled technical and non-technical roles across the company’s corporate offices, tech hubs, fulfillment centers, retail stores and transportation network, or even pursue career paths outside of Amazon.
Programs include Amazon Technical Academy, which equips non-technical Amazon employees with the skills to transition into software engineering careers and Associate2Tech, which trains fulfillment center associates to move into technical roles regardless of their previous IT experience.
“For us, creating these opportunities is just the beginning. While many of our employees want to build their careers here, for others it might be a stepping stone to different aspirations,” said Beth Galetti, senior vice president of human resources at Amazon, in a statement accompanying the announcement.
“We think it’s important to invest in our employees, and to help them gain new skills and create more professional options for themselves. With this pledge, we’re committing to support 100,000 Amazonians in getting the skills to make the next step in their careers.”
But while Amazon insists the retraining initiative could help workers eventually move to other companies, it will also no doubt place the business at a competitive advantage.
That’s because the U.S. unemployment rate currently stands at 3.7 percent, a historically low level, making it difficult for retailers to attract the skilled workers they need. So, Amazon is essentially creating its own.
“We are seeing Amazon and other companies investing more in training and retraining because the labor market has gotten tighter,” Jed Kolko, chief economist at job site Indeed, told WWD. “The unemployment rate is near its lowest level in almost 60 years, which makes it harder to hire workers and harder to retain workers. Retraining is one of the strategies company can use to have workers with the skills they need.”
At the same time, with its voluntary retraining initiative Amazon is also addressing the issue of retailers having to battle the big four tech companies for talent as more retail jobs skew toward technology, with LinkedIn data finding that software developer is now the fastest-growing job in retail and the third-most popular job across the industry.
Amazon’s own research within the company found that its fastest-growing highly skilled jobs over the last five years are data mapping specialist, data scientist, solutions architect, security engineer and business analyst.
This is not the first tactic Amazon has employed to boost worker morale amid an extremely tight labor market. In November, it raised the minimum wage to $15 an hour for all U.S. employees, including those at its Whole Foods grocery chain.
That is more than double the current federal minimum wage and gives a raise to more than 250,000 employees as well as 100,000 seasonal holiday workers.
Some other major retailers have also been trying to up their training and pay game lately. Walmart Inc. last year moved its minimum to $11 an hour, citing the benefit from changes to the tax code, while Target Corp. last month raised its starting wage to $13 from $12.
Earlier this year, Amazon and Walmart got embroiled in a war of words over their minimum wages. When Amazon founder Jeff Bezos called out his competitors to up their wages, Dan Bartlett, Walmart Inc.’s executive vice president of corporate affairs, took to Twitter almost immediately, telling Amazon to pay its taxes.
On the training front, Walmart has opened a large number of training academies across the country where associates receive instruction on retail fundamentals and area-specific skills. It also has invested in providing specialty training for thousands of associates.
As for whether Amazon’s efforts on both training and pay will be enough to silence its critics — including Vermont Sen. Bernie Sanders, a Democratic presidential candidate — who have raised concerns over treatment of workers, that remains to be seen.
A strike at an Amazon warehouse in Minneapolis in a bid by workers to improve their pay is set to take place when the e-tailer holds its annual Prime Day shopping event on July 15.