Usually lost in all the hype about holiday shopping are the seasonal workers who make it all possible. Every year, tens of thousands of people are hired for a few months during the holiday season, and of course this year is no exception. During the rest of the year, Amazon employs around 20,000 workers to staff its 40 US fulfillment centers. Amazon will be hiring more double that amount for this holiday season alone. About 50,000 “temporary associates” will be brought on to work in its fulfillment centers in order to deal with the massive increase in sales which starts around this time each year. ( http://multichannelmerchant.com/2012-holiday-preparedness/Amazon-to-hire-50000-season-fulfillment-center-employees/ ) Amazon is far from the only one, either. Walmart, for example, announced in September plans to hire around 50,000 people for their stores and Target will be adding anywhere from 80,000 to 90,000 people to deal with the holiday season.
It is one thing to double or triple your staff, however, and quite another to make it work. These hires cannot be made carelessly or without proper planning, which all goes back to the management and how they control their operations. The staff has to be trained quickly and effectively to ensure that when the amount of staff at a fulfillment center triples, there are not inefficiencies created. As has been discussed in a few prior posts on this blog, Amazon’s fulfillment centers are incredibly efficient. There is a reason that they are set up how they are, and this system works almost flawlessly throughout the year. During the holidays though, things are pushed to their limits. Of course, by now Amazon has been through plenty of holiday seasons already, so I’m sure the system is mostly streamlined and improving year to year from the management side. I wonder what it is like though for the employees to go through that sort of transformational change in the work place, a setting which could have a couple hundred one week and over a thousand the next.
Personally I’ve never had the experience of working somewhere which has had to deal with tons of seasonal hires. But have any of you joined a company as a seasonal worker, and what was that like? Or, have any of you been a regular employee at a company that has brought on a bunch of seasonal workers, and how was that experience?
Over the summer, I interned at Deutsche Bank and learned that DB’s two new co-chairmen were creating a new strategic plan for the bank. I was interested to see what would change in the bank under their leadership, because as one of the largest banks in the world, their decisions could have widespread influence. They announced the details of their plan on Sept. 11 (https://www.db.com/ir/en/content/ir_releases_2012_4062.htm) after much speculation. The usual stuff was there, such as talk about streamlining their operations and reducing costs, and the plan goes into much more detail than I could afford to here. But what I found the most interesting about the announcement was the decision to change the employee compensation structure pretty radically from what was previously in place.
As all of us know, the bonuses of bankers came under much scrutiny since the start of the Great Recession but little tangible change has really been made. The new bonus structure at DB will reduce “bonus payments in relation to business performance and will increase the time horizon for deferred bonus payouts to top management, with a single payment after five years rather than staggered payments over three.” The point of this is to not only cut costs, but to (hopefully) align management goals with long-term performance because the bonus payments will only be received five years after they have been earned, encouraging long-term strategic planning. Additionally, Anshu Jain, one of the co-chairmen, has stated that if the decisions which warranted the bonuses backfire and actually lose the bank money, then some or all of the bonus could be cancelled or taken back. (Of course, if those decisions are actually made in the bank’s best interest and are executed successfully, the deferring of payments won’t really matter because management would still get paid in full.) As far as I know, DB is the only major bank with a plan similar to this, but their hope is that this plan spreads throughout the industry.
Whether this will work is another story, and DB has admitted as much. Banking is a highly competitive industry and with this new compensation plan, DB is liable to lose some talent to other banks in search of higher pay and less responsibility for poor decisions. The hope is that in the short term the Deutsche Bank name will continue to attract the top talent, and in the long term other banks will adopt a similar strategy for compensation to level the playing field. Indeed, DB hopes it is just the first to follow this path and other banks will join them shortly. If not, this could turn into a liability for the bank if potential employees decide it’s too much of a risk and avoid the company altogether. Regardless of the outcome, this is an interesting development in the banking world and one which could have major implications for the banking industry for years to come.