What Amazon's human resources issues tell us about the state of HR tech

Uncover how your company can streamline HR processes.

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“Amazon is the most technologically adept company around and they can't manage HR.”’

These are the words of Kara Swisher, said on a recent episode of the Pivot podcast, responding to the New York Times' revelations about Amazon's troubles with HR tech. Recently, the company faced widespread criticism for its labor practices and as the New York Times article explores, a growing list of HR misdemeanors.

You might ask: if Amazon—one the wealthiest and most well-resourced companies in history—can't find an HR tech solution to handle its needs, what chance do the rest of us have? 

Attendance software issues have incorrectly penalized workers with medical conditions and other life crises for taking time off. Employees report receiving paychecks that are well below the amount they should receive, and in some cases, employees have even been unjustly fired for incorrectly recorded absences. 

Anybody who has ever missed a paycheck or has experienced payment issues can sympathize with the stress and burden it places on families and individuals with bills to pay. Unfortunately, these errors in the system are widespread and have affected employees at as many as 179 warehouses nationwide. 

To add to the problem, Amazon’s HR system makes it difficult for employees to receive any help when these issues arise. Many employees struggle with getting in touch with their case manager as they navigate automated phone trees in an attempt to find solutions. Even if they get past the automated messages and manage to get in touch with a human, communication within the company is subject to delays and errors that can result in weeks or months of lost income. 

Amazon is a large, innovative company with all of the capital and resources needed to be set up for success, yet they continue to struggle to effectively pay people on time, administer benefits, and manage paid time off. So what’s happening here?

The state of HR technology

While these issues certainly do not reflect well on Amazon, HR tech issues impact many companies worldwide. The NY Times article reveals that the main issue at hand is rooted in the patchwork of softwares that Amazon currently uses to track time off, including Salesforce, Oracle, and Kronos. These legacy HR softwares do not effectively integrate and are incapable of keeping up with the challenges that employers face today. 

As a result, much of the effort needed to manage the company’s complex HR processes must be completed manually, placing greater strain on Amazon’s HR employees and subjecting the whole system to human error. 

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Poor adoption and understanding of the system have also resulted in significant miscommunication of how it works and who is eligible for the various benefits. When employees do not receive the benefits that they are eligible for and entitled to, it becomes a legal compliance issue too. The company has been brought to court over these violations of state law, costing the company valuable time and resources and placing greater strain on fatigued employees.

Amazon, with around 950,000 employees in the United States alone, is a major employer. Globally, the company has 1.3 million employees. As a result, the company has a very complex system and structure in place. While Amazon is a case study where company size contributes to the issue, companies do not need to be a behemoth to face challenges with navigating multiple, ineffective HR tools. 

The role of HR leaders has become more complex

Complexity in the system is not going away any time soon. As more companies embrace distributed work, the challenges of managing payroll, benefits, and PTO are only going to increase. The more geographically spread out a company’s workforce is, the more challenges there are to navigate different state and country requirements. As companies increasingly look to hire abroad and to tap into labor markets internationally to access top talent, they need to expand their benefit package options to account for different laws and regulations. 

Keeping track of the different benefits available to employees distributed across country lines is no easy feat. It requires thorough training for HR employees to understand the different requirements and systems, and the nuances of when to apply each benefit. It also requires digital tools that are designed to meet the challenges of managing an international workforce. These digital solutions should not be overly complex to avoid creating the additional challenge of managing the system. 

Stylized quote that says "There is a need for a modern SaaS solution that prioritizes customer experience and is capable of supporting global teams."

The existing fragmentation within the HR software industry creates inefficiency, redundancy, and inaccuracies in HR processes. The ding to productivity and talent management is distracting and frustrating for employees and employers alike. It is clear that the global employment industry is ripe for disruption. There is a need for a modern SaaS solution that prioritizes customer experience and is capable of supporting global teams that are spread across dozens of countries. 

With the abundance of digital tools available to HR professionals, many companies get caught in the trap of using multiple tools to accomplish different tasks. Issues can quickly arise when a company uses one software program to store employee profiles and records and a separate program for pay and benefits. Employees are required to learn to use all of the different programs, requiring additional time and resources for training. These piecemeal solutions also often require manual data entry, creating more opportunities for inconsistencies and human error. The silos created when using multiple digital solutions also makes it difficult for companies to collect and analyze important data about their processes. Lack of transparency and access to data makes it difficult for companies to effectively identify and address issues with processes and systems before the problem compounds and becomes widespread. Companies are better off streamlining the number of tools that they use to improve efficiency. 

Stylized quote that says 29% of payroll professionals said that their payroll solution is 10 or more years old"

Another common issue that exists within the HR software industry is lack of attention to user experience and design. Digital tools are often glitchy and clunky to use, creating a costly and frustrating experience. Outdated payroll solutions are subject to errors and miscalculations. According to a survey conducted by Kronos with the American Payroll Association, 29% of respondents said their payroll solution is 10 or more years old. These older technologies are unable to keep pace with the rapid changes within the workforce. 

The modern jobseeker will look for companies with attractive benefits such as wellness programs, home office budgets, comprehensive healthcare coverage, disability insurance, paid time off, retirement plans, flexible schedule options, tuition reimbursement, and parental leave. The older software programs are not necessarily designed to effectively track and record this range of benefits that competitive companies are looking to offer, thus requiring multiple technology solutions. 

Creating a vision for a better future for HR tech

At Oyster, we’ve built a global employment platform that is designed specifically to help HR leaders handle the complexities of global hiring so that they can spend less time untangling tax, legal, and compliance issues, and more time building a delightful employee experience and thriving workplace culture. 

With the ability to manage teams across 180+ countries on one easy-to-use platform, Oyster was designed to scale with you. We offer an accessible solution for seamless employee onboarding, effortless global payroll, and benefit and equity management for global employees. 

Amazon will continue to grow as the world increasingly embraces ecommerce. As the company grows, there is an urgent need to proactively address these issues. If there’s one thing that this case study has shown us, it’s that the issues are not resolved with scale, but often exacerbated by it. 

Looking for a tool to help you get started with managing the payroll and benefits for your distributed team? Oyster makes administering benefits and remaining compliant across borders easy and integrated.

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, hire, pay, manage, develop and take care of a thriving global workforce. It lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world with reliable, compliant payroll, and great local benefits and perks.

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