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Pay Your New Hire To Quit Today


Determining loyalty today means keeping good workers tomorrow

Sounds like a strategy for failure, doesn't it? Would you believe a little bribery may deliver better employees for your staff?

If you think only a real screwball of a company could even dream of hiring people, putting them through some training, and then offering them full pay to date plus a bonus to walk off the job, take a look at shoe seller Zappos.

Bill Taylor at Harvard Business Publishing did, finding the astonishing Zappos' strategy while doing so. Zappos is a billion dollar business, up from $70 million in sales only 5 years ago.

Taylor noted the hiring and bribing strategy in use for Zappos. They put someone through the first stages of customers service training. After that comes The Offer:

The fast-growing company, which works hard to recruit people to join, says to its newest employees: “If you quit today, we will pay you for the amount of time you’ve worked, plus we will offer you a $1,000 bonus.” Zappos actually bribes its new employees to quit!

Why? Because if you’re willing to take the company up on the offer, you obviously don’t have the sense of commitment they are looking for. It’s hard to describe the level of energy in the Zappos culture—which means, by definition, it’s not for everybody.

Roughly one out of ten people grab the cash and head for the exit. That leaves Zappos with people who have motivation to continue, and perhaps feel a connection to the company's culture.

Such a strategy isn't for every business. But we've long subscribed to the ideas in The Loyalty Effect, including the concept that continually training new people is far more expensive than retaining existing staffers.

Zappos found a way that works for it, to identify those who may be likely to stick around long enough to fit in and operate well within its culture, and its customers by extension. In the long run, the tactic seems to have paid off for the shoe seller.

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About the author:
David Utter is a staff writer for SmallBusinessNewz covering technology and business. Follow me on Twitter, and you can reach me via email at dutter @ ientry dot com.

Comments

If they're willing to quit

If they're willing to quit after training, then training them was a waste anyway. Keeping someone who won't do the job right is worse than buying them out. It costs a lot more to lose customers to bad customer service than it does to hire the right people in the first place. If they're making good hiring decisions, they don't have much of a problem. One of ten people takes the cash. That means, for $1,000 and the cost of training ten people, they have nine committed, dedicated people. Since one unhappy customer complains to 20 other people, I'd say it's a pretty good deal. Not for the shortsighted, of course, but a very good policy if you intend to stay in business.

Great out of the box idea!

While I agree this concept isn't going to work for everyone, I think there are two things we can all take away from the story...

#1 The cost of hiring the wrong people, then wasting time training them because they quit 3 months later, is much higher than $1000. This example is a fine reminder to all of us to be really picky when we hire. Even if it takes more time and money to get the right person in the door, in the end it's worth it.

#2 It's perfectly okay to do things your own way. I suspect, when Zappo's first started this policy, lots of people told them they were nuts. I mean, "who does that?!?" But they listened to their own instincts and tweaked their hiring model to suit their business. Love it!

So even though they are a big business, I believe there is a lesson here for all entrepreneurs too. Thanks for sharing such a terrific little story!

Stacy

Wowza! that is only possible with

That is only possible with a ginormous corp, such as a Zappos. I would love to hear about something like this but with a smaller company. I fully get the concept, but this is strictly for big ops.

Good story!

It's a little creepy.

 This would work for a really big corporation where the workers are somewhat "interchangeable" - that is, they have similar qualifications that can be found in another, perhaps more loyal, employee.  For a small biz - don't dare do it.  If you're local, you may be training someone who goes down the street with the recipe for your secret sauce. 

If I were offered this as an employee, I'd be a bit puzzled, e.g., are they offering this to everyone, and if so, wouldn't the other employees tip me off as to how to react to the hidden loyalty test?  Meh, I don't like the idea.  It's a little creepy.

 

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