The Solution To All Your Recruitment Problems:

Pay Your Staff A Bonus — Just For Turning Up!

QUESTION: Is this latest move from Amazon the ultimate example of the world gone totally crazy or a smart decision to make their business stronger? Under the headline ‘Amazon Offers Punctual Staff £50 For Turning Up’ the BBC recently ran this report on their news site:

"Amazon is offering a £50 weekly bonus for permanent staff at some UK locations for turning up to work on time. The reward is for people who have 100% attendance, excluding time taken off for sickness linked to disability and COVID.

Amazon said the enticement would help it meet summer and Christmas demand. Last week, the online retail giant advertised a £1,000 joining bonus for new warehouse workers."

All of those years that you spent thinking that part of what we’re paying staff for was turning up……apparently not.

So what’s the verdict? Totally crazy or smart business move? Both.

It’s obviously completely nuts “it wasn’t like that in my day” and the staff who wander in when they feel like it should all be sent to Entrepreneurial jail etc etc.

But……. There is something about Amazon’s approach worth paying attention to. Specifically, their ability to make a business decision devoid of the natural emotional reaction that would normally stop us making such a decision.

Money is not emotional. It just turns up at your door when certain things are done and doesn’t turn up when certain things are not done.

In a growing business, one of those things is having staff do stuff. Furthermore, because money is not emotional, making money decisions based on emotion is nearly always a bad idea.

"...money is not emotional, making money decisions based on emotion is nearly always a bad idea."

So, there is a global staffing/recruitment problem. If your business is impacted by that, you need to make some decisions on what to do about it, just like Amazon did.

An example of a bad decision-making process would be to get angry, frustrated, annoyed (emotions) at a global workforce, some of whom would sooner get benefits than work and many of whom want to dictate their hours and arrival times to you. Maybe you could react this way too. But it’s interesting that Amazon has chosen not to.

They’ve looked at a problem and they’ve found a solution. They’ll have run the numbers and worked out that they’ll make more money by paying the bonus than by not. End of story. Decision made. No emotions.

"They’ll have run the numbers and worked out that they’ll make more money by paying the bonus than by not."

We’re not suggesting you follow their example with the turning up bonus, but the staffing issue is a problem — a growing problem — and at some stage your business is going to have to figure out a solution.

Amazon knows (and we would be smart to also acknowledge) that there is one solution that makes the staffing/recruitment problem vanish, almost immediately: That solution is to throw money at it.

This is a problem that you can almost certainly buy yourself out of, if you’re willing and if you’ve got the cash.

So some points for you to consider:

1) There is a certain liberation in just accepting that you might need to pay new people more. Rather than fight it, which all of your competitors are doing, what would happen if you just went with the Amazon flow and accepted it?

Two great things would happen:

First, if you could engineer things so your business can easily pay people more than the competition, the recruitment problem, which is sucking the energy out of so many business owners, would either disappear or be greatly diminished for you.

Second, you should end up with the best/better people. At best that will make your business more profitable in obvious ways. If not, it should at least make the business run more smoothly which will eventually impact profits positively.

2) It’s important to regard the money you spend on Marketing as an investment, not a cost. There is a very good argument for applying the same principles to staff, particularly the key people and particularly anyone involved in sales.

Everyone obsesses about the amount you’re paying people. The more important question is, how much profit are they generating? As a general principle Entrepreneurs are way too tight about this. Lots of people are doing the equivalent of paying someone 25k per year to bring in 100 sales when they could be paying someone much better 50k per year to bring in 300 sales.

3) There is a direct link between Recruitment and Marketing. Here it is:

Improving your profit margins produces 2 key benefits way beyond money in the bank. The first is that it gives you more money to spend on your Marketing to ‘buy’ more customers. This produces a spiral of success that will leave you with no choice but to be wealthy. The second is it gives you more money to buy great staff. You’re going to need those great staff to handle the growth from all the new customers. Re-read this paragraph. It contains 2 profound secrets of success that most are not aware of, and most who are aware, blissfully ignore.

Happy Recruiting!

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