Industry watches as Amazon taps local manpower

By DENNIS GRUBAUGH
    EDWARDSVILLE — When Amazon speaks, the rest of the world tends to listen, so it’s no surprise that the company’s recent landing in Edwardsville has been something of a learning opportunity.
    From the way in which it hires its employees to its effect upon the region’s workforce to its potential impact on other businesses, the corporate giant has caused others to take notice.
    “A household name like Amazon, the largest (online) retailer in the world, it draws its own attention,” said David Stoecklin, the executive director of Madison County Employment and Training.
    Amazon, of course, has hired more than 1,000 people — perhaps closer to 1,300 by some estimates —  to staff two fulfillment centers, one each in new buildings constructed in Gateway Commerce Center and nearby Lakeview Commerce Center.
    In his 41 years with the county, Stoecklin cannot recall a company with as big a single impact. However, he said his office was called upon little to assist the hiring process, which is rare.
    “Our first contact with Amazon was well before they started their staffing process but one of the things we were made aware of very early on was that they have a very well-orchestrated plan on how they were going to staff,” he said.
    The company, which was staffing at least three communities at the same time (Edwardsville, Joliet and in Wisconsin), had applicants file paperwork on line. Outside staffing firms — none from the Edwardsville market — were used by Amazon. All of the staffing agency workers must undergo a probationary period during which time they remain employees of the agency. After a successful probationary period, they become Amazon employees.
    “From those applications, they called people to the community for an interview. A lot of it was done at Lewis and Clark (Community College), through some local hotels and in meetings at different spots around the region,” he said.
    Amazon wasn’t looking for any kind of subsidy for the employees, just the maximum number of applications to review, he said.
     “We had offered to do any number of things,” Stoecklin said. “They were very set on how this was going to happen. We just stayed out of their way and directed people to the website.”
    The situation was vastly different when hiring took place for Dial, the first major warehouse in Gateway in the late 1990s. Among other things, the county helped staff a job fair for the applicants.

Where they are from

    While more than 1,000 jobs are being brought to the area, many are believed to be seasonal because of the holidays. But the majority are full time. Most workers are from the immediate area, probably 20 miles or less from the facilities, Stoecklin believes.
    Some were people who were working part or full-time at other area warehouses. Amazon brought in very few people from out of the area, he said.
    Most of the rank and file workers are believed to be making as low as $11 to $12 an hour and as high as $16 to $18 an hour. But it depends on the job. However, the benefit package is considered fairly strong, enough to lure some workers from other warehouses, Stoecklin said.
    An Amazon spokeswoman previously said the company does not discuss salary specifics but feels it pays “competitive wages for the area.”
    “But what we’re really proud of us are the comprehensive benefits, starting on Day 1,” spokeswoman Nina Lindsey said. “That’s very unique. Full health care for medical, dental and vision, a 401(k) with a 50 percent match from the company, Amazon stock, bonuses, and generous maternity and parental leave benefits.” Maternity leave is for 20 weeks, she said.
       Nationwide, many of Amazon’s own workers have been critical of the company in on-line reviews, often blaming it for working people 10-hour days and demanding overtime with little notice. Others, though, said the approach was fair or routine for today’s workplace.
    Either way, the company has had little problem attracting workers locally, gathering people from a wide spectrum of backgrounds, some with little warehouse experience.
    Stoecklin learned of one woman with a background in education.
    “So far, she’s done everything from drive a forklift to pick items out for individual packaging. You don’t have to say you’re strictly a warehouse person to be in consideration. They are picking up people from all over,” he said.

Other companies react

    Other companies are believed to be responding to the massive hiring by increasing wages to keep their workers. Stoecklin says that is likely to continue.
    “Absolutely,” he said. “The wages for equivalent positions should raise to be competitive with Amazon. The companies are risking turnover and that’s a decision that each one is going to have to make. They have to stay competitive or watch their employees move to places like Amazon that have the better benefits and training opportunities.”
    Edwardsville’s Director of Economic Development Walter Williams said he, too, has heard the reactions of other businesses.
    “Before Amazon signed ink on the deal, we were receiving calls from other companies nervous about (the competition),” Williams said.
    He said the city is hoping to gather statistics about the Amazon workers and the overall impact to present later, at the city’s annual Economic Forecast Breakfast.
    Williams said he knows of one worker coming the 90-mile drive from Farmington, Mo. He also has learned that several people laid off from U.S. Steel in Granite City have been hired by Amazon.

Are there enough workers?

    So, do Madison and surrounding counties have the kind of workforce to make the Amazon plan a reality?
    “That’s an interesting question,” Stoecklin said. “I think there’s not a shortage. If you ask the data folks, the people that do the labor market and labor analysis, they will say no. But if you talk to a lot of staffing agencies, they’ll say yes.”
    One of the latter is represented by Marc Voegele, owner of Express Employment, who believes that hiring more than 1,000 people puts a strain on the remaining workforce.
    “It’s tougher for everybody to fill spots now,” he said, noting how the Dierberg’s store in Edwardsville recently had signage advertising the need for stockers and bagboys — and offering a $300 signing bonus.
    On the other hand, such worker shortages have a positive side in that people show a willingness to move to where the work is.
    “So that could be a good thing,” Voegele said, noting that housing stock in an affordable community like Granite City could really benefit.
    Large-scale hirings are a concern around the country as Baby Boomers (those born between 1946 and 1964) retire, he said. There are 80 million Baby Boomers stepping out and only 46 million Gen X-ers (those born from the mid-’60s to the early ’80s) in the wings to replace them. That provides an opportunity for some of the estimated 72 million Millennials (those born from the early ’80s to the early 2000s), most of whom are involved in entry level or less-experienced work.
    “We’re already passed the point of Baby Boomers being the largest percentage of workers,” Voegele said.
    Adding to the problem of worker availability is that many people choose “to sit on the sidelines” enjoying one of the dozens of government-subsidy programs that pay them not to work, Voegele said.

What’s next?

    Stoecklin said his office, in concert with the Leadership Council of Southwestern Illinois, was to meet in late November with operators from some of Gateway Commerce Center’s warehouses to discuss the possibility of a survey on needs.
    “We are going to ask them what they find the most problems in filling. What kind of soft skills, vocational or skillsets do they need? Is there a need for more forklift driver training or for more forklift mechanics training?”
    Officials from workforce programs in St. Clair, Monroe and elsewhere are likely to get involved, he said, “to discuss the opportunities coming our way.”
    Stoecklin said one of the identified career areas is logistics.
    “Good forklift drivers are probably already employed elsewhere,” but others with an aptitude could learn the skills fairly easily, he believes.
    “I would not be bashful at all to go to Amazon, a GENCO (distribution) or some of these staffing agencies and say, ‘If you’ll give us a forklift or two, we will use those to train people’,” he said. “It would be the right kind of marriage between government, business and education.”
    As for Amazon’s close-to-the vest hiring practices, Stoecklin believes more and more companies are going on line when it comes to recruitment, noting that Phillips 66 Refinery in Wood River does the same thing.
    “We do all the testing, but they take all their applications on line, screen them, then they’ll bring in people for testing and pick the best of the crop,” he said.
    Madison County Employment and Training offers Internet access and assistance for people who wish to pursue that method of job service. The Illinois Department of Employment Security has people co-located at the Madison County office in Wood River, offering similar service.
    A lot of people 55 and older, still not at retirement, are particularly in need of assistance when it comes to on-line hiring. Stoecklin said.