Watching the markets over the past few weeks and found out some common points that concern companies especially the ones that are labour intensive.
- Reduced operating hours resulting in missed sales
- New hires have less productivity
- High labour costs
Here are some quotes that I came across and are worth mentioning:
Amazon - “In Q3, we saw nearly $1 billion of inflationary pressures, primarily tied to wage increases and incentives in our operations. Our average starting wage is now over $18 per hour with an additional $3 per hour depending on shifts in many locations and sign-on bonuses that can be up to $3,000.”
Chipotle Mexican Grill – “Labour costs for the third quarter were 25.8%, an increase of about 40 basis points from last year. This increase was driven by our strategy to increase average nationwide wages to $15 per hour.”
The above sound more on the wages that are increasing but wait there’s more - Hiring and training challenges.
Waste Management – “I would tell you that when I look at the labour increase whole dollars, and this is in aggregate, about 1/4 of it is related to some additional training and hiring we’re doing.”
Labour Shortage is another concern that needs to be addressed.
Kimberly Clarke – “We mentioned U.S. labor costs and pressures on transportation globally. I think that’s going to remain elevated for a while because I don’t see a fundamental catalyst to change that in the near term.”
That’s all I could notice from the talks – How will the factors mentioned above impact your decisions and are there some factors that you think are at play? Mention them down below!