That’s right, you read that correctly, Zappos CEO Tony Hseich, offers new hires $2,000, plus payment for work done, in the first week of employment if the employee quits. Sounds crazy right? Well as it turns out, only 2-3% of people take the offer. This bonus has been raised by $1,000 since it’s advent.
Ending a job on Friday and starting at Zappos on a Monday would be ideal for candidates, but that really isn’t how it usually goes. Most people that start new positions have had a lapse in employment. Even if that lapse was short, the cost of living keeps adding up, and the checks aren’t coming in. When a new hire is offered $2,000 to walk out the door, this can be a very tempting prospect for a lot of people. This speaks volumes about their company culture and employer brand.
Ever since Zappos hit the e-tail scene, they have made a name for themselves in customer care and speed of service. This brand of service doesn’t just happen because of policies, this kind of care happens when employees are engaged and invested. When employees first start at Zappos, they are put through a 4 week immersion of the brand, culture and values that Zappos runs on, it is during the first 1-2 weeks that they are offered the quitting bonus. So why does Zappos offer it and how do they get away with it?
For most companies, if they were to offer this kind of bonus, they’d go down in a ball of quitting bonuses, but Zappos isn’t most companies. They have put their money where their mouth is when it comes to protecting their culture and values. It’s one thing to claim a culture, it’s quite another to put money down on it. This genuine culture and brand starts with their employees.
This doesn’t only facilitate a great image; it’s a very crafty and effective tool against the all-costly bad hire. 25% of companies surveyed for a MindFlash infographic said that a bad hire in the last year has cost them at least $50,000. Hseich has found a pretty ingenious way to filter out those that wouldn’t fit into the company culture by putting their loyalty and excitement about the company to the test right away.
With the right model, and a rock solid employer brand, Zappos has found a way to cultivate a positive company culture, while weeding out the bad seeds, at a minimal cost. Although the 2-3% take the bonus and jet, that ends up being a fraction of the cost of a traditional bad hire. This new and surprising type of bonus won’t work for everyone, but it sure is working for Zappos.
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