Last week, Amazon announced a “pay to quit’ program that will pay employees $10,000 and three month’s salary to quit the company and start a package-delivery business.
Although this particular program is new, Amazon already offered employees $5,000 just to quit – no entrepreneurship required.
Here’s how Jeff Bezos explained the program to shareholders in 2014:
“Pay to Quit is pretty simple. Once a year, we offer to pay our associates to quit. The first year the offer is made, it’s for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000. … The goal is to encourage folks to take a moment and think about what they really want. In the long-run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.”
Why Amazon’s Pay to Quit Program is Brilliant
The program may seem crazy at first glance – why pay someone for leaving an open seat? However, when you think about the long-term health of the organization, it all comes into focus.
According to a recent study from Gallup, 66% of US employees are not engaged in the workplace. Furthermore, 13% are actively disengaged. These employees are doing the bare minimum to stay employed, or maybe even less. And you can bet that they’re the ones most likely to take the cash to quit.
Sure, the company has to spend time and money recruiting a replacement. But that expense is a drop in the bucket compared to the resource drain of keeping an unhappy, unengaged employee for years. It’s a short-term loss for long-term gain.
Why it Falls Short
Of course, Amazon’s pay to quit program doesn’t do anything for actually acquiring or retaining great talent. All it does is help a company rid itself of bad talent faster.
Sure, it’s great that the program incentives unhappy employees to bite the bullet and quit. But unless you have a plan in place to actually attract, hire, and retain great employees, it’s worthless. All you’re doing is firing, hiring, and burning out employees at a faster rate…all while handing out a stack of cash to every quitter. That makes for a very vicious cycle of high turnover.
Now, we can’t speak for Amazon’s overall talent strategy. Maybe they’re doing a great job of retaining and attracting talent (although headlines like this don’t help). It’s also clear the latest program is designed to get more delivery partners, but the lesson for employers is valuable all the same.
The point is that hiring, engaging, and retaining great employees is always more important than getting rid of unhappy employees. It’s not a bad idea to pay unhappy employees to leave. But that’s only helpful if we have a holistic talent strategy for getting the right people to replace them.
Contact us to share your thoughts on whether Amazon’s pay to quit program is a good idea…or a terrible one!