If You Work for This Online Retail Giant, They’ll Pay You — To Quit

by Jessica Sommerfield · 23 comments

Did you know that the online retail giant Amazon offers its workers money to quit? In any normal business, this would seem anti-productive and a waste of money.

Sure, people quit all the time. But should you give them an incentive for it?

Amazon and Zappos (the company that first came up with the idea) seem to think so. Here’s why:

It Weeds Out the Slackers

Offering a large lump sum to workers who want to quit naturally filters out those workers who are discontent, or otherwise unmotivated.

Based on the employee’s years of service, the sum offered begins at $1,000 (after one year), and maxes out at $5,000. Essentially, Amazon is weeding out those people who don’t want to work in their warehouses within the first five years of employment.

But just how many people take advantage of this offer? Amazon reports that between 2-3% take the money and leave. Considering how large Amazon’s workforce is, this isn’t a very significant percentage. Even though Amazon pays out large sums of money to workers who quit, it considers a better workforce an even trade.

The typical person who takes the payout didn’t really want to be there in the first place. Obviously the payout won’t last that long, so they’ll have to find other employment (hopefully someplace they want to be). At Amazon, however, their presence won’t be missed. They’re most likely the least productive and least motivated individuals on the team.

So, if you’re a slacker, or your heart just isn’t in it, the message Amazon is sending is that it doesn’t want you. Take it and leave.

It Proves the Dedicated

The opposite side of the coin is that by refusing the offer to quit, workers who stay are able to prove their dedication and enjoy a sense of pride in their commitment. Of course, workers still might not feel as dedicated as Amazon would hope — they simply might not think the payout amount is worth the loss of employment.

In general, however, Amazon’s payout offer improves the quality of the work force. It ensures that the majority of its workers are happy and feel a sense of fulfillment, which leads to higher productivity, better customer service, and greater profit margins.

It Inspires Self-Examination

It’s so easy to get stuck in a job that starts out as the “daily grind,” and, before we know it, becomes the “lifetime grind.” More often than not, we don’t change things in our lives we don’t think are broken. We conform to the norm, or the status quo.

Nothing is horrible enough about our jobs to inspire us to quit or start job searching, but we’re not really happy or fulfilled in our work, either. Often it’s only when faced with these decisions that we really stop and take a look at what’s keeping us where we are.

Do we really enjoy our jobs? Do we secretly wish we could find something we enjoy more, or that utilizes more of our skill sets? What are our five-, ten-, and twenty-year plans?

Answering these questions may help us decide if we need a career change, as well as improve our job performance right now. Realizing you really love your job may inspire you to put more effort or creativity into it, or even set your eyes on a promotion.

What do you think? Is Amazon on to something with pay-to-quit incentives? 

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{ read the comments below or add one }

  • Zoolz says:

    Those who cannot leave are often the most dedicated because they absolutely need the paycheck. I know bosses who only hire sales people who have expensive lifestyles because they know they work the hardest!

  • Randy says:

    Everyone tells me my son is a hard worker – but he took the Amazon buyout. His bottom line was that he didn’t enjoy the lack of contact with other workers as he was on a shelf line all by himself all night long. Its a great policy for weeding out those who aren’t happy with their job. Everybody wins!

    • David @ MoneyNing.com says:

      Thanks for the additional data point. The policy definitely has its merits, no doubt about it!

  • Ruth Cooke says:

    I get that an incentive might get the less motivated employees out the door faster, but I’m wondering if Amazon didn’t really do it to decrease turnover. Hiring and training new employees is a huge cost, and often employees who don’t quite “fit” will quit within a few weeks, or a couple of months. By having a carrot at the end of a year that actually grows larger the longer you stay, Amazon may be encouraging new employees to stick out the difficult adjustment period and give the job a real go. A few thousand dollars wouldn’t be enough to make me quit a job I enjoyed that was also supporting me and my family, nor would it make me give up seniority or a pension.

    I don’t know how a 2 to 3 percent turnover of employees with one or more years’ experience stacks up to the industry standard, but it seems to me that it might be on the low side. (But then, my experience is mostly fast food and retail). I’d be interested to know how it’s affected the turnover of employees with less than three months’ experience.

    • David @ MoneyNing.com says:

      Decreasing turnover is an interesting take. On the flip side, maybe they are ENCOURAGING turnover. Warehousing is a tough job on the body, and I wonder if they find that people who stick it out more than five years are just not in as good of a shape as those who first start out, so they rather them leave and hire new blood.

      Just a thought!

    • Sam Klyzub says:

      Amazon does NOT eat the cost of training their employees; that is paid through the temp agencies, hence why all of their hiring is done through those companies. Amazon pays no money until the employee is offered to be hired in.

  • Alex @ Credit Card XPO says:

    This is my first time hearing about this and I think it’s a brilliant and innovative way to retain the best of their workforce!

  • Michael says:

    I heard this a few years ago, but did not believe it. What a unique approach in keeping those who enjoy what they do. Amazon.com leads the way to innovative internet commerce, so it stands to reason they would come up with an employment policy like this. I am amazed they there retention rate is 97-98% with 2-3% choosing the money to leave. This is very interesting and one to keep an eye on to see how it continues to play out.

    • David @ MoneyNing.com says:

      Innovate or fall behind. Amazon is definitely in the former camp!

      • Sam Klyzub says:

        That 97-98% is complete bs. We lost about a fifth of our employees at the Goodyear, AZ facility every time the buy out meetings happened. Everyone was brought in in groups of five, with two or three taking the buyout each time. It usually had nothing to with laziness, but everything to do with their bodies could not keep up with the physical demands of the job. Two weeks before Thanksgiving starts mandatory overtime, with PTO not an option; thats at minimum 55 hours per week during that period.

  • David @ MoneyNing.com says:

    The money is a tiny part of every employee’s compensation. Even if none of the original intent of weeding out the bad applies work, the good will left to the departing employee will still keep him/her as a customer for life.

    I don’t think Amazon can lose here.

  • LeisureFreak Tommy says:

    I would hope they would have figured out long before 5 years to get that maximum payout who the slackers are and had already dismissed them. Which leaves me wondering if they really do loose great employees ready for a new adventure who would leave anyway and Amazon is just adding a little seed money to help make it happen. All in all an interesting take by Amazon and nothing like I have seen anywhere else.

    • David @ MoneyNing.com says:

      I don’t think it matters if an employee is good or not. Even incredibly talented employees who’s heart isn’t in it anymore is pretty ineffective, which is why an incentive to get them out the door is such a great policy.

  • Jayashree says:

    Amazon is always innovative and try new approaches and that’s why they are leaders in retail domain and have A+ players working for them.

    • David @ MoneyNing.com says:

      Absolutely. The beauty of a company like Amazon is that they aren’t afraid to try new strategies. With proper testing, they’ve already found that policies they have are working, while most other companies simply guess their way to mediocrity.

  • property Marbella says:

    Hi Jessica,
    They might lose good workers also, who might take the money to start their own small businesses, creative people who have learned something new and has good ideas on Amazon and want to try their own wings.

    • David @ MoneyNing.com says:

      Of course, there will be exceptions but I would argue that the vast majority of good workers who are going to start their own small businesses will do so whether they get that $5,000 or not.

  • RitzP says:

    Hi Jessica

    I agree with 1st point that people who are not content, will leave and this will be beneficial for the company.

    2nd point is a bit daisy..There may be a chance that people want to leave but they do not have any other option to join. Their family conditions may not be allowing them to leave. So you can not say that you will be only having people who are dedicated.

    • David @ MoneyNing.com says:

      Those who cannot leave are often the most dedicated because they absolutely need the paycheck. I know bosses who only hire sales people who have expensive lifestyles because they know they work the hardest!

  • Michelle says:

    Wow that’s pretty interesting! I didn’t know that companies even did this.

  • Roxy says:

    I wonder if this option offered to all employees or just a select few?

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