Woolworths’ ‘dystopian’ workplace might improve KPIs, but it demeans workers

For those of us who are employed, imagine this: You wake up, take a shower, eat some breakfast and head into work. Upon arrival, you don a headset that directs you around a warehouse – where to go, how long it should take you, and how long it actually takes you, every step of the way.

Your toilet breaks? Tracked. Stopping to tie up your shoelace? Also tracked. Taking the long way around to avoid a broken bottle of pasta sauce or spilt milk? Definitely tracked.

Workers at Woolworths’ massive warehouses are kept to strict KPIs.Credit: Eamon Gallagher

Come the end of the day, when you’re physically shattered from living in your own real-life version of Pac-Man, you hang up your headset and, as you clock out, a performance score between one and 100 appears on-screen, telling you how perfectly or poorly an algorithm has deemed your efforts to be.

Even for the most avid sci-fi fans, this surely reads like some sort of dystopian future. But for Woolworths’ pick and pack staff (the lovely folks who prepare online shopping orders), this is reality.

With 201,000 staff to its name and a market capitalisation of about $40 billion, Woolworths is one of the largest and most recognisable companies in Australia. But after months of embarrassing publicity, most notably the ACCC’s exposé on dodgy pricing practices, and former chief executive Brad Banducci being threatened with jail time at a federal Senate inquiry, come these revelations.

Though not an entirely new practice, and not used by Woolworths alone, this alleged escalation in optimising employee output is nonetheless seriously concerning, not least because the company is Australia’s largest private sector employer.

It’s difficult to make a case for supporting the supermarket giant, or for allowing it to continue enjoying its duopoly status.

In the 2023-24 financial year, Woolworths recorded a 5.6 per cent increase in annual revenue (totalling $67.9 billion). During the same period, a substantial sector of its workforce were being treated like hamsters on a wheel.

According to recent reporting by Guardian Australia, when a new framework with enforced efficiency rates was introduced last year, employees who failed to meet the predetermined performance requirements were subject to coaching and at risk of disciplinary action. In a warning letter, staff were told to “stop all the time-wasting and non-productive behaviours”.

While it’s probably fair to say that every large workplace has a few rogue slackers, that can’t be true for people working in picking and packing roles because we all know that grocery shopping is strenuous work.

Putting aside the ethics of treating human beings like robots, the obvious danger in this work model is the risk of someone hurting themselves. According to data from Safe Work Australia, you’re now more likely to be injured working in the grocery, liquor and tobacco product wholesaling industry than if you work in coal mining.

What’s more, this model is bad for the business bottom line. According to its annual report, in 2022, Woolworths had 197,773 employees. During that same period, 62,433 employees quit. That’s a turnover rate of 31.5 per cent, more than three times the national average.

In a 2016 study, researchers found employees who are micromanaged are more likely to disengage from their work and to have higher rates of absenteeism and resignations compared with workplaces where staff are happy and treated well.

Another high-profile company that has paved the way for treating workers as disposable cogs in the profit machine is Amazon. In 2022, it also had staffing problems. The company’s executive was told it could run out of workers by 2024 if it didn’t address the ultra-high churn rate (150 per cent a year) of warehouse staff who pick and pack online orders.

Initially, Amazon founder Jeff Bezos believed high churn was a good thing, saying high staff retention rates would lead to a “march to mediocrity”. That mentality is perhaps what led to managers of a Colorado Springs warehouse to create a makeshift barrier around the body of 61-year-old employee Rick Jacobs, who died from cardiac arrest on the floor of an Amazon warehouse just before the end of his shift.

Another high-profile company that is notable for putting undue stress on its warehouse workers is Amazon.Credit: NYT

As Jacobs’ colleagues clocked on for the new shift and got to work packing orders at a manic pace, they were unaware that their friend had died, let alone that his body was still in the building, or that they were literally working around him.

It’s difficult to fathom why this course of action was taken for any reason other than prioritising targets and profit. I don’t know about you, but personally, I’m more than happy to wait an extra day for my delivery if it means that a deceased person can be treated with dignity.

This robotic approach has also taken its toll physically. In March, the US Occupational Safety and Health Administration found its warehouse employees were disproportionately likely to experience serious injury, accounting for 79 per cent of injuries among warehouses with more than 1000 employees. And in June 2024, the company was fined $US6 million ($9 million) for failing to disclose productivity requirements to its employees in two locations.

But the other major risk to Woolworths is how customers react to this news. Because between its seeming disdain for customers shown through alleged price gouging, the obfuscation of its former CEO, and now its treatment of employees, it’s difficult to make a case for supporting the supermarket giant, or for allowing it to continue enjoying its duopoly status.

Victoria Devine is an award-winning retired financial adviser, best-selling author and host of Australia’s No.1 finance podcast, She’s on the Money. Victoria is also founder and co-director of Zella Money.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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