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Would you pay your employees a bonus to quit? That’s a question raised by TikToker Amy of @HackYourHR.
Her company offers a “resignation incentive program.” Employees who give at least 30 days’ notice before resigning get a 30% bump in compensation during the notice period. The employees take on some additional responsibilities during that time, like creating a transition plan, “so you are incentivized to help the company as you leave.”
On the company side, this builds predictability around transitions and could minimize the loss in productivity as new team members gain their footing. A common estimate of the cost of an employee turnover is 1.5 to 2 times the salary of the departing worker; reducing the cost of lost productivity might make the program worthwhile.
Amy, who says she “lead[s] human resources at a global company,” said its Pay to Quit program was inspired by the one Zappos famously offered its employees, and which was subsequently adopted by Amazon after it purchased Zappos in 2009. Jeff Bezos described that program in a 2014 letter to shareholders:
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 headline on the offer is “Please Don’t Take This Offer.” We hope they don’t take the offer; we want them to stay. Why do we make this offer? 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.
“The offer” remained in place until 2022, when Amazon made most employees ineligible to participate. In a message to employees last January, the company announced it would restrict the program to those who completed a training module called Career Choice—which reimburses tuition for employees attending certain education programs—and only for 90 days after graduating. Amazon didn’t say why it was making the change, but some commentators cited a tight labor market as a reason for Amazon to remove incentives for employees to leave.
Do you offer a “pay to quit” program at your company? Would you? Tell us about it.