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Amazon is spending big to retrain employees – and so should you

By July 19, 2019No Comments

(This post originally appeared on The Guardian)

Amazon has been getting a lot of bad press lately, with workers protesting conditions and wages and the EU announcing that it is now weighing antitrust investigations against the e-commerce giant. But last week the company said that it will be doing something that is not only good news for their workers, but a call to action for small employers, too.

The company announced it will be spending more than $700m over the next six years in order to retrain more than 100,000 of its US employees – a full third of its workforce.

“While many of our employees want to build their careers here, for others it might be a stepping stone to different aspirations,” Beth Galetti, senior vice-president, HR said. “We think it’s important to invest in our employees, and to help them gain new skills and create more professional options for themselves. With this pledge, we’re committing to support 100,000 Amazonians in getting the skills to make the next step in their careers.”

Amazon is investing its millions into new internal programs that will help its employees learn how to be software engineers, operational managers, artificial intelligence experts and mechanics. The company will also be expanding its apprenticeship and internship programs.

Sure, you say, big companies like Amazon can afford to do stuff like this and there’s no argument there. But what about small firms like yours and mine? Maybe we’re not able to spend millions. But we can be doing something similar. In fact, we must. Want three ideas?

For starters, the IRS allows businesses to deduct up to $5,250 every year per employee for educational expense reimbursement and the amount spent is also not taxable to the employee. That means that we can send our employees for training, certifications, conferences and workshops to become better at their jobs and acquire more skills and get a tax benefit to boot.

A 529 plan is an after tax defined contribution arrangement that allows both an employer and employee to save money – tax free – and then use those savings to pay for higher education expenses. If you’re not offering these plans you should. It’s not only a great (and inexpensive) benefit to provide your employees but Congress is considering expanding these plans to allow employees (and employers) to help pay down their student loans and use those savings for other educational related costs.

Finally, you don’t have to be Amazon to offer internships and apprenticeships. All it takes is a partnership with a local high school or technical college and a commitment by your company to not only make these opportunities available every year to as many students as possible but to also contribute time and resources in the form of management visits, company tours, speaking to students and sponsorships. This kind of commitment, after a while, will engrain your company with that school and open up employment opportunities that will benefit not only your business but students who otherwise would never have had the chance.

You can say that big companies like Amazon have more resources than small businesses, and of course that’s true. But if you take a close look at what they’re doing to better train their people and enhance their skill sets you can be doing something very similar for a much lower investment. Amazon is doing this to not only their current employees but to make themselves attractive to prospect ones.

Considering the strength of the economy, the tight labor market and the need for skilled employees I’m not sure we have the choice but to do something similar.

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