These days it seems like another day, another Amazon headline. But the latest news from the $1 trillion company, announcing they will raise the company's minimum wage to $15 an hour is bringing out even more opinions than usual.
Most importantly, Amazon's move further proves a strong economy and stronger job market is pressuring businesses to bid up wages. This is especially relevant to startups competing for talent with major players like Amazon, which these days happens all over the country, not just in Seattle.
So what can founders take away from Amazon's latest news? Here's my take:
Get out from under Amazon's salary shadow.
Amazon will always push the bar when it comes to wages, benefits, etc. and most companies can't compete. The biggest concern is when Amazon has a strong hold in your market, it can make securing top talent more difficult. This is true not only for Amazon but for founders looking to start up in the Valley or other tech hubs with above average cost of living. This is why we at Techstars encourage founders to look outside places like Silicon Valley to grow their business. There's great talent everywhere, as long as you know how to uncover it and can offer them attractive opportunities.
At Techstars we work with a number of startups in our accelerator programs outside Silicon Valley in places like Detroit, Indianapolis, Boulder and more. Starting your company in these places can offer a number of benefits in addition to a more reasonable cost of living like better work-life balance for employees and more diverse backgrounds and team members who are less jaded from the Silicon Valley rat race.
Always address your team's concerns, even if it's not something you can fix
The conversation around Amazon increasing wages isn't new -- the company has taken heat for it's minimum wage workers (particularly those working in the large network of warehouses) for years. While Amazon has been a pioneer in many respects, critics argue they waited too long to make the wage increase jump. Founders can learn from Amazon's experience with internal and external pressure by addressing your team's concerns in the moment (as much as that is possible) rather than waiting until pressure is so high that it starts to boil over.
Being proactive about getting feedback around employee satisfaction is crucial to building a strong startup. Whether you choose to do more structured and formal quarterly surveys and reviews, or more ad hoc informal check ins with your team, having that open line of communication to ensure issues are dealt with in a timely manner can be the key to keeping your best employees happy and engaged.
Inevitably there will be certain complaints or requests from employees that you aren't able to fix, things like retirement planning or more snacks in the kitchen may be things your team requests. If you aren't financially able to offer those perks or benefits, addressing the request and explaining why it is either not a strategic priority based on your corporate values or just not in the budget right now but might be in the future, it's important to at least acknowledge your team's concerns to demonstrate a commitment to transparency.
Do the right thing, even if it's uncomfortable.
Now, not everyone agrees that raising the minimum wage for workers was the "right" thing to do, but at the end of the day Amazon decided it was the right thing to do for their company and for their employees, which reveals the final lesson to be learned for founders.
As a founder, there will be many times where you are forced to make decisions that require you to balance what is best for the company with what's best for your investors, for your customer, for your employees or even for you. Many times these different stakeholders will be at odds and sometimes you'll be forced to negotiate your way to making the best of the worst options; however, it is vitally important for founders to remember that doing the right thing will never be the wrong thing, even if it is uncomfortable.
Whether it's increasing wages, cutting ties with partners or customers that don't share the same values or changing your internal policies to ensure you are being inclusive of all employees, you cannot and should not ever eliminate your conscience from your business. Your passion, your ideas and your values are what got you to this point, don't abandon them, especially when you start to see success.