Amazon Canada hikes front-line worker pay and plans to hire 15,000 more people

Amazon Canada says it is hiring up to 15,000 more people in Canada and will boost the pay for its front-line workers to up to $21.65 an hour.

The e-commerce giant announced in a media release Monday morning that the hiring spree would boost its Canadian head count by about 60 per cent.

The wage hikes are immediate and will be for all current full-time and part-time staff, as well as new hires. While the company doesn't specify what it means by "front-line worker," the pay increases work out to an extra $1.60 to $2.20 per hour.

The moves to beef up compensation and employee numbers in Canada come as the company is making similar enticements in the U.S.

Last week, Amazon announced it would pay full tuition and other fees for its front-line workers at hundreds of colleges across the U.S. in a move the company said would cost it more than $1 billion US over the next four years.

Monday's Canadian release says that offer extends to Canadian workers, too, although details are sparse. The so-called Career Choice program for Canadian Amazon workers says the company will pay up to 95 per cent of the tuition costs "towards a certificate or diploma in qualified fields of study" at various colleges, although no complete list of qualifying schools or programs of study is provided.

Wage pressure growing

Economist Sal Guatieri of Bank of Montreal says Amazon is just the latest large employer having to step up its offerings in the face of what has become a seller's market for labour. The U.S. economy currently has more job openings than unemployed people, and Canada is not far off from the same status, he said in an interview with CBC News.

"Many of the largest retailers in the U.S. and Canada have been raising their minimum pay to retain workers and attract new workers because their business is booming especially due to the surge in online shopping," he said in an interview. But while sectors such as retail and hospitality are seeing big wage gains, those gains haven't yet moved up the chain in a big way.

"Wage growth is running higher but it's really not accelerating, it's kind of stabilized," Guatieri said. "It's speaking to people just worried about losing their jobs and kind of not bargaining hard for wage increases."

While many companies have managed to take advantage of that employment uncertainty and  thus not had to raise wages, that isn't the case for Amazon.

Daryl Boehringer, an analyst at independent stock research firm Edgewater, said in a recent note to clients that a lack of labour is slowing the fast-growing company.

"Amazon is having more serious issues hiring people at the [fulfilment centre] level specifically and it's getting worse," he said. "[They] are drowning, even with limited inventory flow. It's because they have less personnel to turn goods around."

Boehringer noted that the company increased its total U.S. employment by more than 60 per cent in 2020, and now employs 750,000 people in the that country alone.

"We have heard that Amazon may be seeing a higher degree of employee churn and/or challenges in converting new hires to full-time employees in the wake of ongoing stimulus benefits and constrained labour conditions," he said.