Hire Right & Pay People to Quit




Zappos is known for its stellar and personalized customer service. Their motto is that they are a service company that happens to sell shoes. It’s a clear message that service comes first. In order to provide this kind of service, however, you need strong employees. What is Zappos’ secret?

They realize that a job is not for everyone, and they work hard to find the best fit possible for employees. You may or may not heard of “The Offer” – once an employee is hired, they go through the training process. About a week after their training is completed, they are given the offer – stay at the job or you will receive your pay to date plus a $2,000 bonus to leave.

Sounds crazy, right?

Surprisingly, only 2-3% take the company up on the offer; the rest stay.

More recently, the company made a bold move to change the way the company operates. They focused on a different management structure, holacracy. Simply put, this removes hierarchies within a company so everyone is essentially equal. When they put this into place, they again realized it may not be for everyone. When they made the switch, they explained the new structure to employees and made another offer – stay with the company, or leave with three months’ severance pay. This resulted in a higher number of employees leaving – approximately 14% of the staff took the buyout.

Did this concern Zappos? Not really.

The company holds firm to their theory that employees need to have the right fit to be successful, and, in turn, make the company successful. If 14% of the staff felt that the new management system would not work for them, then that was okay.

What can you learn from this example, even if you cannot afford to offer a buyout?

Hire right: by looking at the most successful employees, HR departments can create a “profile” for hiring purposes. This can be useful during the hiring process – finding someone that meets the requirements and will fit with the company culture will result in a lower turnover.

Keep in touch with the health of your culture: make use of employee feedback surveys, hold regularly scheduled meetings in which employees can share the good, bad, and ugly of their work, and use other methods to be sure you are aware of what’s going on with staff. Being aware and listening to employee feedback can go a long way in ensuring employee satisfaction, which directly affects customer satisfaction.

Show employees their value: Zappos is great at this – the company not only hires right, but offers great employee perks, such as fun outings and events. This creates a “fun” environment to work in, and one that helps with longevity and loyalty.

While Zappos is a great example in general, the hiring and buyout process is particularly interesting. They realize the cost of hiring right, and also understand that sometimes it may not be a good fit after all, so it’s better (and more inexpensive) to cut ties early if needed. One of the many reasons the company is so successful!


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