The release of confidential information about a company’s activities, products, services or employees can create a crisis for organizations by damaging—or further damaging—their credibility, image, and reputation.
When those documents are leaked, it’s a crisis management best practice for companies to tell their side of the story. Amazon has done just that in response to the release of confidential information about its high rate of employee attrition and other matters.
The issues raised by the leaked documents cast a spotlight on important aspects of today’s workplace and how business leaders respond to them—or should—so that they do not create a crisis for their businesses.
‘The Documents Paint A Bleak Picture’
Endgadget received and was the first to report last week details about leaked confidential Amazon documents that were prepared earlier this year. Endgadget said the information showed that the online retailer has an annual employee turnover rate of 150%—double the industry average—costing the company and its shareholders $8 billion annually.
The materials, “which include several internal research papers, slide decks and spreadsheets, paint a bleak picture of Amazon’s ability to retain employees and how the current strategy may be financially harmful to the organization as a whole,” according to the news outlet.
The documents “also broadly condemn Amazon for not adequately using or tracking data in its efforts to train and promote employees, an ironic shortcoming for a company [that] has a reputation for obsessively harvesting consumer information,” Endgadget wrote.
Statement From Amazon
“We weren’t afforded the opportunity to review the draft documents cited in the Engadget article,” Steve Kelly, an Amazon spokesperson, said via email.
“That said, they are most certainly early drafts that weren’t appropriately refined or vetted, let alone finalized. 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 them had been fully vetted or approved,” Amazon said.
Learning From Amazon
CEOs, business experts, and HR consultants weighed in with their observations and opinions about Amazon and thoughts about what business leaders can learn from the company.
‘A Crisis Of Culture’
“How well Amazon pays relative to the market is certainly a relevant factor, but the mass quitting could originate from a crisis of culture,” Robert C. Bird, a professor of business law and Eversource Energy Chair in Business Ethics at the University of Connecticut, said via email.
“If employees do not feel valued or do not envision a long-term future for themselves at Amazon, if jobs are available, they will seek employment elsewhere. Every employee that leaves Amazon takes with him or her valuable firm-specific human capital,” he observed.
“This includes knowledge and experience that is specific to Amazon that 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.
Have The Right HR Policies
“An important lesson business leaders can learn from this is to have a good work culture and set HR policies that support trust, inclusion, and fairness,” Adrienne Couch, a human resources analyst at LLC Services, said via email.
“HR policies directly impact the organization’s reputation, employee motivation, and retention. The policies guide the employees, communicates what the business expects of them, and prevents problems like the mass quitting Amazon experienced,” she noted.
‘Employees Need To Be Valued’
‘’While there are many factors to consider before offering salary increases, an increase in salary and other perks are important for employee motivation and retention,’’ Couch commented.
‘’As a business owner, giving employees a raise based on performance show you value their effort and motivates them to work harder, win-win situation.
“Employees are a crucial resource for a business and need to be valued and appreciated. Be considerate to them, listen to their complaints, and give them opportunities to grow and perks that match their lifestyle to give them their best input at work,” she concluded.
Create A More Positive Work Environment
“Business leaders can learn from [Amazon’s] mistakes and create a more positive and motivating work environment that offers employees greater job satisfaction,” Berry Moise, a business consultant, said via email.
“Creating a supportive and positive culture, offering competitive compensation, and providing opportunities for career growth can help to reduce the high turnover rate at Amazon,” he advised.
‘A Blended Approach’
“One of the things that is fascinating here is that Amazon is a salary-first company. They don’t believe in supplementing total compensation with employee perks. That’s clearly, not working. Law firms do the same thing, and it’s not working,” Amy Spurling, founder and CEO of HR software company Compt, said via email.
“You have to have a blended approach. First, because there is a ceiling on what you can pay an employee. Second, because if employees don’t feel truly supported (beyond pay, health insurance, and time off), they will absolutely leave,” she predicted.
Amazon’s New Hourly Wage
Weeks before the publication of Endgadget’s article about the leaked documents, Amazon announced new employee-related initiatives.
“Employees across customer fulfillment and transportation [departments] will now earn, on average, more than $19 per hour in the U.S.,” John Felton, Amazon’s senior vice president of Worldwide Operations, said in a statement.
“They also have access to a growing range of comprehensive benefits to support themselves and their families,” he added.
“Continuing to invest in pay, providing easy access to earned wages at any time during the month, and offering great benefits and career advancement opportunities are all part of our long-term efforts to be the best employer in the world,” Felton concluded.
New Perks And Benefits
In response to the leaked documents, an Amazon spokesperson said via email, “Less than a month ago, we announced the continued expansion of our pre-paid tuition program for higher education and job training and the creation of an anytime pay system.
“This is in addition to the fact that most of our employees— hourly and salaried— receive access to comprehensive health care, dental, vision, and other benefits on day one,” he concluded.
The Bottom Line
Companies should not be shy about touting the positive things they are doing. And when faced with the leak of confidential documents, organizations should —as Amazon did—tell their side of the story.
And the sooner, the better.
Otherwise, what others may have gotten wrong could become conventional wisdom. And the longer that inaccurate or outdated information is left standing, the harder it will be to set the record straight.