Amazon.com has put several hundred million dollars in Kentucky to open 11 fulfillment, return and customer service centers and become one of the state’s largest private employers. The online sales giant says its next $25 million in commonwealth investment will go into workforce development.
The 15-year relationship with Kentucky has been a fruitful one for both the commonwealth and the largest-yet-still-growing online retailer in the United States.
With more than 7,000 full-time employees based in Kentucky, Amazon is now slated to invest more than $25 million in the Bluegrass State over the next two years and prove that a business-friendly atmosphere at all levels of government, the state’s prime logistics location, and a capable and educated workforce really do pay off.
“Amazon continues to invest in the state of Kentucky, and that’s the really good news,” said Amazon’s Campbellsville fulfillment center General Manager Carlos De La Garza, one of the company’s first employees in the state. “I think we’ve found that the relationship has been very positive and mutually beneficial. We look at the larger scale and look at the last 15 years. The total investment in the state has been about $350 million.”
That’s powerful validation of the state’s logistics sector strength. Kentucky operations are within a day’s drive of more than half the U.S. population, and major global air-freight shipping hubs at the Louisville and Cincinnati-Northern Kentucky airports offer ready access to customers literally all over the world.
De La Garza was among the original employees in Campbellsville, which started out as one of only five Amazon.com
order fulfillment centers in North America and recently celebrated its 15th anniversary. Beginning with just 35 employees, the company has methodically expanded to become the state’s fifth-largest employer with centers and other facilities in
Louisville, Lexington, Winchester and Northern Kentucky.
Besides the commonwealth’s logistics assets and infrastructure, the retail giant cites two big factors in its Kentucky success story that are so simple yet so powerful: community cooperation and workforce development.
“Amazon has been a great corporate partner in Kentucky for more than 16 years,” said Larry Hayes, secretary of the Cabinet for Economic Development. “The company not only continues to grow and invest in its multiple operations here, but through its workforce development and training programs, Amazon also is making the commonwealth a better place to work, live and do business.”
“We’ve been thrilled being in Kentucky the last 15 years,” said Amazon spokeswoman Nina Lindsey. “It’s been absolutely wonderful. We have more than 10 fulfillment facilities after we started in Campbellsville 15 years ago, and that really attests to the positive nature of our relationship with Kentucky and with the elected officials and all of those who supported Amazon coming to Kentucky. We went from about 30 full-time employees to 7,000. That is a strong testament to how great Kentucky has been to Amazon.”
The cooperative support extends from the local levels all the way up to the state levels, Lindsey said.
But perhaps more important, she said, is the available workforce that has allowed the company to grow and invest so much money over 15 years.
“The state is honored to have such a strong relationship with a company of Amazon’s caliber,” Hayes said, “and we look forward to supporting their efforts for generations to come.”
Amazon in February made about 100 direct hires for its LEX1 and LEX2 facilities, skipping the typical process under which new workers must successfully put in 1,200 hours as Integrity Staffing Solutions employees before consideration to become a full-time Amazon associate.
Logistics success takes a workforce
“Whenever we were looking to locate a new facility, the most important thing is workforce,” Lindsey said. “Also, in Kentucky we are as close to our customers as we can be. We have fast shipping speeds.”
In fact, Amazon CEO Jeff Bezos is known to occasionally select a complaint email and personally call managers and employees for an explanation of a late delivery.
Lindsey said facilitating Kentucky’s quality physical logistics assets wouldn’t be possible without the abundance of talent in the area.
De La Garza is a testament to the caliber of Amazon employees and the staying power that results in treating employees well. A military veteran and Kentucky high school graduate, De La Garza is proud of the investment Amazon is making in its employees. The company is putting its money where its mouth is. A large part of the new $25 million investment is being spent on building an onsite Career Choice classroom for the Campbellsville employees.
At all Amazon fulfillment centers, associates who have been with the company for at least a year receive 95 percent of their tuition paid for undergraduate classes, skills certificate courses or other continuing education programs. In Campbellsville, students currently take classes online or at Elizabethtown Community College, but when the new classrooms are completed they won’t even need to leave Amazon’s sprawling campus.
Career Choice allows for employees to pursue more education at very low cost, even if it is in a subject not necessarily related to their daily duties. Calling it a “big step forward,” Delagarza said holding college-level classes on Amazon’s campuses will only add another degree of flexibility for employees.
“We have had very positive responses,” De La Garza said. “Our associates have shown interest in computer and information technology. We do a CDL (commercial driver’s license) course. And with all of our classes, we have maxed out attendance.”
Highly educated employees, he said, will be able to do more complicated tasks and ultimately speed up and improve service for customers.
Also, happy employees are more productive ones, he said, adding that employees in Campbellsville have a lot of fun at work and have many channels available to give feedback to their superiors.
Motivated, valued employees are innovative
“We involve associates in helping identify the best way to fulfill for our customers,” De La Garza said. “We’ve had a lot of success in those programs.”
Employees are compensated well and stick around for a long time.
“On the average we pay 30 percent higher than other traditional retail jobs,” De La Garza said. “We offer benefits, starting from Day One.”
A motivated and highly valued workforce, Lindsey pointed out, also tends to generate more workplace innovation. Some of the company’s fulfillment center inventions have come directly from associates in Kentucky.
“We had an associate in Hebron working with a lot of apparel items, and some of these are very high-end apparel items. The associate noticed that some of the dresses, for example, would touch the floor,” Lindsey said. “She thought if she was that customer, she wouldn’t want her nice dress touching the floor, so she raised it to her management team at the center and was given leeway to invent an entirely new way of transporting garments inside the facility center.
“They came up with a brand new kind of mobile garment rack that they use now, and the invention has been implemented worldwide.”
She said ideas like this happen “organically all the time” largely because of the company’s commitment to “kaizen,” a Japanese word for “continuous improvement and change for the better.” Associates are allowed to take time out from their schedules and partner with managers, scientists, researchers and engineers to work on processes, ergonomic workstations, conveyer belts, storage and other aspects of the workplace.
Amazon believes its bottom line benefits from listening to the people doing the work every single day, Lindsey said.
Direct community support also
De La Garza noted that Amazon also is giving back – $250,000 over the last two years – to the community as a part of its business model.
“On a more personal level the really good news is we also continue to invest in nonprofits and schools in the community,” he said. “For me personally it’s really important.”
The company donates to nonprofits like Kosair Children’s Hospital in Louisville, Dare to Care, and local high schools.
Other recent investment examples include new energy-efficient light bulbs and lighting fixtures in its Lexington fulfillment center to improve environmental impact, upgrading associate amenities in Hebron, increasing the reach of Amazon Learning School, and funding new technologies in its fulfillment centers.
Amazon is rapidly growing and likely will continue investing in Kentucky, Lindsay said. While she said she could not disclose details about future growth, she left no doubt that it will happen. Lindsay cited the company’s relationship with the state as one that continues to grow and continues to evolve.
“We continue to nurture and foster that,” she said. “It’s not something that just happened 15 years ago. We continuously work at and engage with community partners.”
Abby Laub is a correspondent for The Lane Report. She can be reached at [email protected].