Most companies have retention plans to retain talented professionals and to keep down costs associated with employee churn rate which leads to increasing spend on recruiting, hiring and training new workers.
Businesses use perks, flexible work schedules, tuition reimbursement, onsite child care, free drinks and even nap pods to show workers that management likes them and wants them to achieve their goals and enjoy their jobs.
Few, if any, have the unique strategy Amazon.com has in place regarding retention efforts.
In his annual state-of-Amazon letter to shareholders, which provides updates on all Amazon business streams and strategies, founder and CEO Jeff Bezos also include insight on the e-tailer's 'Employee Empowerment,' strategy. It's wedged between the update on Amazon Web Services and Military Service support efforts.
The strategy is called 'Pay to Quit' and it's just that simple. Bezos credits the program to shoe e-tailer Zappos and says his fulfillment centers have been 'iterating' on it.
Essentially Amazon pays employees who decide to quit. The first time the 'offer' is made, the pay-off is $2,000.Then it jumps a $1,000 more each year until capping at $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," writes Bezos in the letter. "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."
What's a little fuzzy is how the program is initiated. In the letter Bezos calls it an offer, seemingly something a manager would say to a worker who apparently isn't performing well or seems unhappy. Instead of firing them, the employee is asked to take this special offer. But if they decline, and somehow keep their job, they can get that same offer for five years. What happens then, who knows?
The big question is whether in taking the offer do employees waive potential unemployment pay? If someone gets fired, they can file and receive unemployment, at least in New York. However it's not so crystal clear what happens in the case that an employee takes a pay-off to leave or resign and gets a bonus to leave.
Unemployment insurance is a huge cost for many global companies and one that HR and corporate management want to keep as low as possible. Is that what is behind Amazon's 'Pay to Quit' program? We're not sure given we're not employment lawyers.
And what's more curious, given Bezos provides stats and numbers on most other initiatives, is that Amazon doesn't reveal what the annual 'pay to quit' costs were for last year or what's expected for this year and how many employees have taken the offer.
In whatever scenario, whether lots of workers take it, or lots offered don't take it, it somehow doesn't seem to be something to boast about in an annual shareholder letter.
