The Case for Amazon’s 30-Hour Workweek Experiment

by Fronetics | Oct 25, 2016 | Blog, Strategy, Talent

A reduced workweek may mean better performance, talent retention, and bigger payoff for employers.

In August 2016, the Washington Post reported that Amazon plans to pilot a program in which select teams will work just 30 hours a week. The teams’ employees will be salaried and receive full benefits, as well as 75% of the pay full-time employees earn. The entire team, including managers, will work on this reduced schedule.

“We want to create a work environment that is tailored to a reduced schedule and still fosters success and career growth,” states an event posting by the company. “This initiative was created with Amazon’s diverse workforce in mind and the realization that the traditional full-time schedule may not be a ‘one size fits all’ model.”

The program comes just a year after a New York Times report depicted Amazon encouraging marathon workweeks while discouraging vacation — and even unfairly evaluating employees in the wake of personal crises like cancer or miscarriages.

Will the new part-time program help combat that image? Will the 30-hour workweek model impact Amazon’s productivity? While Amazon does not plan to roll the program beyond the select teams, research suggests that the company might reap some positive benefits from employees’ working less.

A reduced workweek benefits employees and the employer

Let’s look at how working fewer hours might result in healthier, more productive employees.

1. Shorter hours improve the physical and emotional health of the worker.

A National Bureau of Economic Research study examined manufacturing companies that experienced an unexpected spike in exports, meaning longer working hours, and the resulting toll on employees. The findings revealed that long hours on the job increase an employee’s risk for heart attack, depression, and injury. But despite more health concerns, employees took fewer sick days. The impact on productivity when a company has more sick, injured workers is self-evident.

On the contrary, a shorter workweek correlates with better physical, mental, and emotional well-being. That translates to more alert, adjusted, happy employees who have more stamina to complete their jobs. In fact…

2. A reduced workweek does not decrease productivity — rather, it often increases it.

There’s a reason 43% of companies offer shorter workweeks to some employees: It has a positive impact on their bottom lines. Just how much? Tax services firm Ryan saw revenue and profits almost double and client satisfaction reach an all-time high. KPMG goes as far as to say it uses flexible work hours as a “strategic business tool” that “allows us to accomplish our business goals and become more successful.”

Well employees leading balanced lives are able to accomplish more in a shorter amount of time, and that pays off for their companies.

3. Shorter hours may increase employee engagement and decrease turnover.

All the extra hours workers are putting in actually drive disengagement. Left wholly left unchecked, the culmination of issues arising from an unbalanced work-home life can increase absenteeism and turnover. Simply put, employees logging long hours are significantly more prone to burnout.

And turnover can be costly for employers. The U.S. Department of Labor currently estimates the average cost of a bad hiring decision to be as much as 30% of an individual’s first-year potential earnings. Think about how that adds up as employees put more time with the company and earn higher salaries.

Going back to Ryan, the tax services firm, implementing a shorter workweek reduced the company’s turnover rate from 30% to 11%. That’s huge.

So, Amazon is definitely onto something with its 30-hour workweek experiment. The question is, what will happen when it succeeds? Will more businesses try reducing working hours? Could something like this work for your business?

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Talent-retention and succession-planning for the supply chain

by Fronetics | Oct 20, 2015 | Blog, Leadership, Logistics, Strategy, Supply Chain, Talent

It’s common to think of the people who work for a company as “employees”, but reframing language and thinking could be critical to your supply chain. Start considering your employees as “talent”. The word employee has the connotation of working for someone or under someone. It implies being one of many, whereas the word talent has a positive connotation, implying that a person has depth, value, and potential. The term talent empowers both employees and companies to be the best and seek the best in their work and their search for other skilled people.

Reframing is an important step, but it doesn’t fix common problems that plague supply chain managers and human resource departments. It’s important to think about hiring processes as a long undertaking that extends beyond an ad, job interview, and offer letter. Companies should always be thinking about retention and promotion. This is called succession planning.

According to a study conducted by supply chain management researchers at Auburn University and Central Michigan University, 37.5% of surveyed companies had no engagement in succession planning, 27% had just started to work on planning, 23% engaged in informal planning, while only 12.5% engaged in formal succession planning.

Acquire

The supply chain is notorious for having a dearth of talent. The area is growing and more talent will need to be acquired for businesses to compete. As job titles expand and shift, due to the rapid changes in supply chain management and technological requirements, many people won’t be qualified for their own job title. Looking towards universities who are teaching supply chain management, and looking to other business sectors could be critical to find the right, flexible kind of talent the supply chain will need. Considering women for these traditionally male-dominant roles will also be important as women tend to be strong in many of the soft skills needed for the future of SCM. According to Shanton J. Wilcox, vice president, North America, and lead for logistics and fulfillment at Capgemini, “many so-called tactical jobs will be replaced by positions requiring more interpersonal and relationship management skills.”

Develop

As more and more money floods into the supply chain, it will be important to avoid the Silicon Valley problem of poaching, or talent leaving for larger and larger salaries elsewhere. Investing in current employees in a meaningful, attentive way, could make all the difference. Think about their future and next steps within your company. They probably have a plan for their future, and you should as well. Make sure those plans align and be open to assisting their journey to meet their goals.

Instead of conducting exit interviews, try conducting “stay” interviews. Ask specific questions about what it takes to create the environment that would help encourage your talents’ best performance. Ask what works, and also ask what doesn’t work. Be specific and ask what causes your talent anxiety or stress. You may find a trend and be able to fix it before people leave, rather than after. Investment is a big part of development. It helps talent feel like part of a bigger picture. If you invest in them they will invest in you.

Advance

Consider talent from within. According to a Forbes article, many companies are getting it wrong in trying to hire from outside. Internal candidates may not seem as appealing or exciting as the unknown, external candidate, but companies need to be clear-minded in these decisions. “Internal successors are in many ways lower risk than outsiders, yet surprisingly few promotions are awarded internally. That appears to be because boards often prefer the devil they don’t know to the devil they do. Also, some find it difficult to imagine someone at the top after seeing him operate in a lesser role for years.”

Internal talent may not appear to be ready for the next level if the position they’re seeking is a promotion, whereas an external candidate going for the same job may be making a lateral move and appear more “ready”. One thing to consider is the knowledge the internal candidate holds and brings to the job. Getting external talent up to speed can take months if not years.

Don’t sit back and assume your employees are willing to be passive about their careers. See your employees as assets. Have a strategy. Be part of their team, and make them part of yours. See their talent and invest in them, otherwise they’ll find another supply chain company who will.