Starting this month my company is now paying employees $1,000 to quit. This is not an April Fool’s joke. It is a move taken directly out of the Zappos playbook. I first heard about this through Harvard Business Review back in 2008:
If you know anything about me you probably know I’m a big fan of Zappos. I’ve read Tony Hsieh’s book Delivering Happiness a couple of times and I’ve done their Las Vegas office tour – twice. I always thought that the idea of paying new employees to quit was a novel idea. It seems like a great way to cut our losses if we hire someone who might realize that they aren’t the right fit. Even though it was something I wanted to do, it was something I just never really considered implementing, until last month.
I was in a board meeting at another company and we were talking about hiring and onboarding and one of the other board members had started a year earlier to pay his new employees to quit. Just like Zappos, he saw about 10% of new employees take the deal. But he said it was well worth it because he felt like he was left with much more engaged employees who were all more committed to the company for the long-term. He said it’s difficult to estimate what the cost of some bad apples do to the rest of the company. It was better in his estimation to pay a few thousand dollars a year to get rid of the bad apples sooner.
At the end of that discussion I decided that I had put it off long enough. I decided to pay my employees to quit the company. So that’s what we do now. At any time in the first 30 days they can quit, and we pay them $1,000. The only caveat is they can’t be re-hired.
What about existing employees? Since we just rolled this out, we decided that for the next 30 days anyone in the company can quit and we will pay them either a week of pay, or $1,000 – whichever is greater. For existing employees, we will work with them to set their exit plan. In order to receive the payment they have to work until the date we mutually decide upon.
Today is April 2nd. Nobody has quit yet. Twenty-eight more days to go!