Amazon salaries benchmarking
Amazon is the second biggest public employer worldwide. In 2021, they were employing 1.3 million workers, more than 70% of those uniquely in the US. They have a compensation plan that helps retain employees for at least 7 years. How do they do that? Are they offering competitive wages? This article will provide key insights to discover how Amazon remunerates its workers.
How does their compensation system work?
Even if in this article we will only base comparisons and values on the base salary, two other components are annual payouts (bonuses) and restricted stock units (“RSUs”). They give lots of weight to the RSU since they used to assume their stock prices to go up over time. In 2022, they are in the middle of the creation of a new compensation plan since stocks have decreased 15% since their peak in July 2021.
Moreover, in the performance variable for the salary, they consider the performance of the whole company (reflected in stocks). As carrus.io describes it, the compensation model consists on:
- First year: base salary + payout + 5% RSU
- Second year: base salary + payout + 15% RSU
- From the third year on base salary + 40% RSU
This model has successfully proven to retain talent.
It is not just the base salary
Most jobs at Amazon offer other non-monetary benefits. The most common is “equal opportunity employer,” followed by the 401(k) plan (company-sponsored retirement account), professional development, health insurance, diversity, and employee discounts. Some positions, mainly IT positions, have full benefits.
Remote positions commonly benefit from flexible working hours, work-life balance, and choosing their own equipment.
Salary benchmarking in Amazon
To start with, we will take a look at the whole range of salaries. The salaries correspond to worldwide workers but are mainly shaped by US workers, who represent the huge majority. There are three main peaks of salaries: the ones from 20k€ to 30k€ annual wages, the ones around 70k€ and, finally, the ones of 140k€. The highest peak is 28k€ which corresponds to the wage for warehouse assistants and operators.
This tendency just prevails in the United States. In other countries such as the UK or Canada (second and third forces by the number of employees), the 28k-peak does not exist, and the wage mode is 20k€. Germany is a whole different scenario, where the peak is in 60k€, due to workers being mainly logistics and operations managers or software engineers.
The big group of salaries between 25k€ and 30k€ a year is related to the departments of “transportation and material moving” and “production”. Specifically, the most common positions are warehouse assistants and packers. The other peaks are for positions related to information technology.
Another difference between the peaks is that for the low one, average seniority experience is 2 years, for the middle seniority is 3 years and, for the high one, seniority ranges from 5 to 20 years.
Salaries for Amazon’s high positions
Full-stack and backend developers are among the better-paid positions. Because the IT department has a maximum wage of 140k€. The fact that this quantity is very common, is not a coincidence. The company has established a salary base limit of 160k dollars a year (which corresponds to 140k euros). Some data in our database includes salaries higher than that due to some bonuses taken into account.
Having said that, on February the 7th 2022, Amazon announced a change in their salary policy, as published in GeekWire. After the change, the base salary limit is 350k$, an increase of more than double. The higher position in other companies such as Google, Facebook, Apple or Microsoft were earning much more than the higher positions in Amazon. Amazon has implemented this change in order to be more competitive.
The gender wage gap at Amazon
Women’s wages follow a similar pattern to men’s wages, peaking at around 25k€. However, they lack the 140k€ one, and, the middle one, instead of being 70k€, is now either 45k€ or 60k€. In the whole company, 36% of the labor force is female. Women make up only about 15% of positions earning more than 100,000 euros per year.
Amazon salaries by position
As previously mentioned, the IT department is highly related to high salaries. This data is highly bound by location. For instance, Germany and India are the fourth and fifth countries by the number of employees, and, in both countries, one of the most popular positions is that of a software engineer. In fact, India is more focused on programmers, analysts, and program managers, while Germany has more managerial positions. Germany has its peak at 60k euros, whereas in India it is between 15k and 35k euros. Indeed, the average annual salary for a software engineer at Amazon India is 15k€. Meanwhile, in the United States, a warehouse assistant (typically a lower-paying job) earns €25,000.
Using the position of a “software engineer,” we can analyze the annual wages in the five countries with the most Amazon workers:
- United States: usually 90 to 100k€, up to 160k€ in a few cases.
- United Kingdom: 40 to 65k€, up to 145k€ in a few cases.
- Canada: usually 60 to85k€, up to 130k€ in a few cases.
- Germany: usually 60k€, up to 100k€ in a few cases.
- India: usually 10 to 25k€.
Worldwide, the average salary of a software engineer is between 55 to 95k€. We can conclude that all countries, except for India, more or less offer competitive salaries.
In fact, a general vision of the IT department in the US, points to salaries from 95 to 140k€, while the average salary for IT workers in other US companies is from 60 to 95k€. In other countries (India included), Amazon also offers higher salaries than its competitors.
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