Would You Quit for $1000?

Harvard Business Press has a great article on the new retention strategy being practiced by shoe manufacturer Zappos. It seems that after initial training, the company offers the new employees $1000.00 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. Zappos wants to learn if there’s a bad fit between what makes the organization tick and what makes individual employees tick—and it’s willing to pay to learn sooner rather than later. (About ten percent of new call-center employees take the money and run.)

First, if the numbers in the article are true, Zappos can afford to do this. With revenues of $1B a year or more, this provides an opportunity to some creative things in terms of recruiting and retention. Creativity is one thing that is definitely lacking when it comes to luring qualified people into the company.

Second, let’s look at the people this offer is made to. These are call center workers. This is a position that has requirements which can vary widely depending on the industry they serve. You might have some very educated, experienced people on the phone at Cisco or other high-tech companies. These are considered moderately to highly skilled positions. At other times, you might have less skilled people on the phones at a shoe company, for instance. (Really … how much support can you provide for a shoe?)

The less-skilled people can find a similar job with little effort most of the time. Many of them are job-hoppers looking for a “what can you do for me now” position. Occasionally they are people who have flunked out of similar low-skill positions at other companies. If the $1000 offer to quit helps to weed these people out, then I am all for it.

What kind of people take the offer? There are some people in this world who are just looking for a position that pays something so they can get by between jobs. They are the ones who live for the here and now and have no forward-thinking possibilities. If offered the $1000 to quit, a small percentage will take it and run. They don’t want to work anyway. It’s free money to them. That will make a car payment, pay rent for a month, or help stock the refrigerator with alcoholic beverages while they are looking for their next gig. Mission accomplished.

So what makes people reject the offer to quit? As someone who is intimately familiar with the call center environment, I can tell you that there are two primary factors that keep people around for an extended period of time. First, there are some with a strong work ethic who really care about the customer, enjoy solving problems, and simply thrive in that kind of environment. These are the true geeks of the world and will be there as long as the company will have them.

The other people may not be as hip to solving problems or working in a call center, but like the culture and benefits. If a cable company (just as an example) can provide $13.00 an hour, an opportunity to increase that wage through optional sales/upgrades to the customer, and provide FREE cable TV, high speed Internet, and deeply discounted home telephone service, they have a powerful retention tool. This is also an incentive for some to hang around longer than they would have normally.

Something else that needs to be looked at is the interviewing/recruiting strategy of Zappos. Could this whole idea of paying people $1000 to quit be unnecessary if people with an adequate level of enthusiasm and skill were attracted to the company in the first place? I know that a very small percentage of the new hires are actually taking the offer to quit, but what’s the possibility that they’re scaring off someone who would make a fine employee but simply had a momentary lapse of reason when cash was waived in front of them?

At the same time, there are 1000 other factors that we’re not looking at. Geographical location in comparison to the supply of workers who can do this job is a factor for any call center operation. If it works for Zappos, so be it.