Joining the likes of its fellow heavy hitters in retail, Amazon recently announced a new initiative to pay the full cost of college tuition for 750,000 hourly employees based in the U.S. Additionally, Amazon is introducing new education programs that provide employees an opportunity to learn new skills in data center maintenance and technology, IT, user experience, and research design.
Representing yet another large-scale retail corporation enhancing its benefits and perks programs to retain and attract employees, what does this trend indicate for the larger retail community as it faces a competitive job market?
President and CEO, Patrick Spear, weighed in.
Given its scale, market cap and momentum, this announcement is a game-changer. As we continue to see minimum wage and hourly pay increase, these trends have become the “ante” in the game, setting a new standard across many industries and retailers. And now, for employers, the battle is moving over to employee benefits to remain competitive and attract the right candidates to their company.
While Starbucks, Walmart and Target have made similar announcements, this news in particular will put immense pressure on the smaller and more independent retailers (as well as large employers near Amazon fulfillment centers), who will not be able to offer a similar benefit.
Relative to the incremental costs to fund programs like this, I expect increased pressure on the supplier community, given the purchasing power and leverage big retailers represent. While the additional education expenses could lead to inflationary pressure, Amazon and others may use the threat of private label expansion to drive branded supplier price concessions, support, and program funding.
Retailers, this begs the question, what avenues are you exploring to stay competitive in retaining employees?
Suppliers, what creative support and problem-solving are you employing to partner with retailers to stay in the game against private label?
Intentional conversations are needed in our retail community. Whether through the Strategic Meeting events, retail roundtables, service and tech solution discovery, or other collaboration opportunities, GMDC|Retail Tomorrow is here to stay on top of retail trends and help you navigate them. Need support? Shoot us an email.