Amazon pays employees to quit

A couple months ago, multiple news outlets ran a story about Amazon’s offer to pay employees up to $5,000 to quit their jobs. “I need a job like that” was probably your initial thought when you read the story, but you may have also thought about how some of your clients could benefit from adopting the same strategy.

Amazon got the idea from Zappos, which it bought back in 2009.

The program, called Pay to Quit, was discussed in Amazon’s April 10, 2014 letter to shareholders. Here’s what they say:

It was invented by the clever people at Zappos, and the Amazon fulfillment centers have been iterating on it. 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.

Aside from the obvious benefits of ending up with employees who actually want to work for the company, an employer who is struggling with the employer mandate might also consider this approach. While it’s illegal to shift an employee to part-time status just to avoid offering them health benefits, paying an employee to go away appears to be ok (since Amazon’s doing it), and the employee could certainly be replaced by a part-timer.

No, this won’t solve most of your clients’ problems. But it is an interesting approach, and it’s also more fun to talk about something like this than it is to talk about health insurance. So when one of your clients is really frustrated and trying to figure out what they’re going to do to minimize the impact of the play or pay requirement, maybe you could ask, “have you ever thought about paying your employees to quit?” If nothing else, it’ll put you back in control of the conversation.

We talked about a similar approach in a white paper back in April called No-Cost Employee Benefits: the best freebies employers can offer their employees. The idea is that your clients probably don’t like talking about health insurance, so why not talk about something else? That something could be less expensive or even free perks they can offer their employees, or you could talk about bribing their employees to quit their jobs. Either way, it will get them engaged in the conversation and make it a little easier to start discussing the real challenge they have – figuring out what to do about their group health plan. Think of it as a warm-up exercise.

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