Amazon is launching a hiring spree for its new Anchorage distribution center. Will there be enough workers?

Amazon on Monday announced that it has begun hiring hundreds of people to staff its new warehouse and distribution facility, opening in Anchorage next year.

The effort comes amid a widespread labor shortage and a near-record number of job openings across Alaska.

The site, which Amazon calls a “last mile facility” or a delivery station, is currently under construction at the former Sears warehouse at 5900 Old Seward Highway off Dowling Road.

The Seattle-based e-commerce behemoth said in a prepared statement that it has begun hiring for full-time and part-time roles this week.

The company said it will offer a starting wage of $20 an hour, and eligible workers will get health care, vision, and dental insurance, a 401(k) retirement-savings opportunity with a match from the company, and up to 20 weeks paid parental leave with six weeks for supporting parents. Career-advancement opportunities are also available, the company said.

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“Our forthcoming last mile facility in Anchorage will help us provide faster, more efficient deliveries for customers,” said Natalie Banke, an Amazon spokesperson, in a prepared statement. “We look forward to sharing more details as the site gets closer to launch.”

“This delivery station will play a pivotal role in Amazon’s logistics network, serving as the last stop before packages arrive at customers’ doorsteps in Anchorage and surrounding areas,” Banke said. “Employees will sort packages based on delivery routes, then load them onto vehicles for delivery service partners and flex drivers who will finalize the delivery of a wide array of goods to customers.”

Competition for workers

Joelle Hall, president of Alaska AFL-CIO, a federation of unions, said the $20 an hour starting wage will face serious competition from other companies during a widespread labor shortage in Alaska.

“There’s a huge amount of competition at that price point, so you know, good luck,” she said. “I think they’ll have a challenge because everyone is having a challenge, and that’s a price point that’s just a regular price point these days.”

Alaska is currently a difficult environment for companies hoping to hire workers, because of the widespread competition for employees, said Dan Robinson, head of the research and analysis section at the Alaska Department of Labor and Workforce Development.

“It’s a tough, competitive market for everyone, Amazon included,” he said.

The details of Amazon’s offers to employees will be important, he said.

“Everyone looking to hire and retain have to deal with the fact that applicants have more market power right now,” he said.

Anchorage, like the rest of the U.S., is experiencing a near-record number of job openings, according to a recent report that Robinson wrote in the state agency’s latest Alaska Economic Trends magazine.

There have been close to two open positions in Alaska for every person hunting for work, the report says. That’s a reversal from the historical norm of more job seekers than openings.

Job openings hit 40,000 in summer 2022 in Alaska, where the population numbers about 730,000. The job openings have fallen only marginally since then, the report says.

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The problem is driven by long-term patterns such as people aging out of the workforce, the report says. That was compounded by early retirements during the COVID-19 pandemic. Also, in Alaska, more residents leaving the state than moving here is another long-term contributor to the problem, Robinson said in an interview on Monday.

Hall said Amazon doesn’t have a reputation as a good employer nationally, so they’ll need to provide more incentives and treat employees fairly to find and retain a workforce in Alaska.

Amazon has increased its average starting wages amid concerns about a labor shortage, and a historically high attrition rate at the company. An internal research memo at the company expressed concern that the company could run out of workers to hire for its warehouses by 2024, Fortune reported last year.

Banke said LinkedIn has named Amazon one of the top places employees want to work for 2023, the third straight year.

She said that in addition to boosting pay and offering other career-advancing programs, Amazon has created a $1.2 billion program to educate operations staff, with full payment for college tuition or other types of education.

Warehouse improvements underway

Amazon late last year said it will establish a “state of the art” distribution and warehouse center at the Dowling Road site, with enough parking space to handle more than 100 delivery vans, according to Amazon permit applications for the project filed with state and federal agencies.

Amazon is in the process of upgrading the 90,000-square-foot warehouse and parking lot. The company has said it would add 125 parking stalls for workers and additional space for loading products outside a docking area and for the safe flow of vehicles, the applications show.

The improvements at the facility are expected to cost about $26 million, according to a prospectus by a real estate investment adviser describing aspects of the Amazon project.

The property is the only ground-based Amazon facility in the state of Alaska, it says.

The increasing global importance of cargo operations at the Ted Stevens Anchorage International Airport are a factor in Amazon’s decisions to invest in the facility, the prospectus shows. Since 2019, Amazon has used the airport as a hub to improve package delivery to Alaskans. The airport has also provided Amazon with access to the rapidly expanding markets in Asia, the prospectus says.

The recent road improvements off Dowling are key to the investment, providing a central location in Anchorage with quick access to the Alaska road system, the prospectus says.

Amazon will host an in-person hiring event Oct. 11-13 at the Dimond Center Hotel at 700 E. Dimond Blvd., in South Anchorage, the company said.