Amazon is lazy in the one place it should be hard-working.

The New York Times published a great story about Amazon 10 days ago. I’ve thought about it a lot. Amazon treats its employees harshly. It fires a lot and forces even more out by making their lives hard.

I wrote a story last week about how this won’t work well. Most people can’t hack 80 hours a week. Our productivity drops. But a tiny percentage thrive.

Amazon wants to hire the best and brightest. And that’s terrific.

red=smarrrrrt.
Top 2.5% of smart people are marked in red

There’s a bell curve of bright people. Amazon wants the ones on the right. The red group who represent the top 2.5 per cent. And it is prepared to pay for them. Pay is very good. Software engineers get $76,00 to $148,000 a year in salary. And there are big stock bonuses if you can hang around.

But it also wants to hire the people who want to work first and live second. The 80-hour a week crew. That’s great. Those people need a place to work that welcomes people like them.

Amazon has a right to target such people and it should expect benefits. Here’s a distribution of people by how much they want to work. Amazon wants the red people on the right.

red = diigent.
Top 2.5% of hard workers are marked in red. Emails after midnight! Woo!

But here’s the thing. The red group in graph 1 is not the red group in graph 2.

There is probably some correlation between the two groups, but it will be imperfect.

Here’s a hypothetical distribution of best and brightest, with the people from the top of the willing to work graph marked red.

red lines are tough bastards.
Where the hard workers might fall on the ability spectrum.

Amazon has a problem. The people they want to hire are very few. It can hire smart people, but they won’t all be willing to work hard enough. It can hire hard workers, but they won’t all be smart enough.

There are two ways of solving this problem. The easy way and the hard way.

The easy way is to throw people in the deep end and see who swims. This is a scatter-gun approach that says “recruiting candidates with a high chance of success is hard, and we are lazy.”

Screen Shot 2015-08-24 at 8.40.08 pmThe hard way to solve the problem is to narrowly recruit more people with a higher chance of success.

Rather than hiring “high volume recruiters” maybe they should look into hiring “high-accuracy recruiters.” This will cost money in the short-run. But it will probably be smart in the long-run.

Staff learn on the job. I’ve never had a job where I reached my potential in my first year. By burning so many staff so fast Amazon misses out on improvements. Working people to the bone in their first six months probably gets as much performance from them as they would achieve if they’d been there six months longer.

It’s not smart and the PR cost of hiring so many people that hate working there has blown up.

If you add the “externality” effect of lives damaged, marriages ruined and kids’ birthdays missed, then the cost of Amazon’s lazy recruiting strategy is even higher.

There is a moral imperative for Amazon to stop hiring so widely. Seriously. Stop it. Now.

The one piece of good news in all of this is that the New York Times piece will probably weed out some applicants who are unsuited for the company.

I suspect the names of journalists Kantor and Streitfeld are mud at Amazon HQ right now. But their expose may have actually done the company a favour.

Published by

thomasthethinkengine

Thomas the Think Engine is the blog of a trained economist. It comes to you from Melbourne Australia.

2 thoughts on “Amazon is lazy in the one place it should be hard-working.”

  1. There are few companies that can attract a constant stream of eager and high calibre people – or at least people who confidently believe themselves to be high calibre – Amazon, Facebook, Google, Apple etc. I doubt they represent more than then a tiny percent of companies. If the article is accurate it sounds like they are tailoring their work environment to sociopaths.

    Liked by 1 person

Leave a Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s