You’re Hired: Now Quit

Say you’re hired for a new job. At the end of a four-week training period, your new boss offers you a big bonus to quit right then. Would you stay on the job, or take the money and run?

TwitterZappos employees interact on Twitter.

Think of it as an employer’s test for whether you’ve come on board for the money or for love of the job.

That’s the strategy online shoe-retail giant Zappos is using to cultivate a more committed customer service staff. Zappos, which has banked on strong customer service to grow its business, offers all of its new call center employees $1,000 to walk away after training. Apparently, new hires turn down the buyout offer 90 percent of the time.

Judging from the glowing customer testimonials on their website, Zappos’s gambit seems to be paying off.

The Harvard Business Review has more.

(HT: CT2)


Rick

Sounds like it is the best call center in the history of call centers, depending on how much you value getting your hair brushed by a CFO vs. increased pay (from http://directmag.com/casehistories/ecommerce/marketing_workers_paradise/):

Surprisingly, Hsieh readily admits that Zappos underpays. "In terms of salary, we are either at or below market. The higher the position, the more below market we are. At the VP level, you're probably making less than half of what you could be making somewhere else."

When asked if Zappos offers monetary incentives to employees, Hsieh says: "Nope."

But the firm does pay 100% of their medical and dental insurance, and offers free lunches, snacks and drinks daily.

Still, Hsieh insists, these benefits aren't remotely what keep employees at Zappos. Once again, it all comes back to the company culture.

"Co-workers will burst into song and dance at random intervals throughout the day," writes human resources staffer Christa F. "Upon request, the CFO will groom your hair."

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jonathan

The posters above generally don't understand the economics of employee turnover. It may be easiest to cite Henry Ford; he put in the $5 day back in 1914 not to enable workers to buy Model T's but to reduce turnover. If I remember correctly, Ford's turnover was something near 100% every 3 months, meaning some jobs were likely turning over every few days.

Same general idea here: Zappos culls those who would quit and the employees self-select to stay there, which means they are far more likely to stay (and likely to be productive as well). Reduce turnover, save money in the long run. Reducing turnover saves multiples of the costs of training a single employee - and the $1k bonus to leave is then merely a cost of training.

L33tminion

$1000 dollars is probably not that much more than a few weeks pay. Searching for a new job is a real pain. The only employees that would take the offer are the ones considering leaving already. Employees who are looking for a new job immediately after training are not likely to provide very much value. In customer service, dissatisfied employees can easily provide negative value. So encouraging such employees to move on instead of lingering for a few more weeks / months seems like a good idea to me.

Kevin H

Science has a similar mechanism to weed people out. We just just get paid poorly all of the time!

I'll bet you that the chance a given person will take the money is negatively correlated with the length of their job search. If you've been looking for 3 months for a job, $1000 doesn't look so good compared to another 3 month job search. Zappos' 90% retention may be a reflection of hard economic times for people with the skill set that leads them to customer service work.

Dan

For a prospective career-type job, this would make more sense, but for a call center job? It seems to me rather than keep those who do it 'for the love of the job', you'd only be ensuring you are keeping the dumbest ones (i.e. Those who would pass up $1000 instead of taking the money and getting hired at another easy-to-get job like other call centers, fast food etc...)

Rae

Having worked in call centers before (technical support, returns, teleresearching, etc.) I know the pay can vary. Since I was good on the phones I quickly graduated to the better payings gigs available. If I was making $10 an hour and I went to an employer that paid $18 an hour and I knew it would be hard to match that elsewhere I wouldn't even be tempted by the $1,000. However, if the pay was average and I knew I could get another job easily enough at another call center I would probably take it.

Lord

If this were sprung on me not knowing anything about it, I would jump at it, because I would assume if enough did not accept it you would be laid off without any compensation. To me, it is they saying they weren't interested in having me and I would have no interest staying anywhere I was not wanted. It would be them saying they were only in it for the money.

bdb

"Unless Zappos is magically the best call center in the history of call centers, those people refusing the bonus are nuts."

Considering Zappos doesn't rate CSRs based on metrics like call time, and actually empower them to go out of their way to help customers, it's actually not that far fetched to say, yes, Zappos is magically the best call center in the history of call centers.

Jethro

That seems pretty risky considering the business. I mean, who like call centers? That job stinks! Though, it does make sense to make sure that those who are there will really keep the job when it gets tough.

MH

If someone I worked for did that, I'd assume they were offering the buy-out to new hires b/c they decided they didn't need all of them and wanted to get rid of some while minimizing bad feelings/lawsuits.

Bored@Work

It seems like $1000 is too small an amount to have any effect on the new hires. I'm not sure how much call-center employees make, but $1000 would probably be less than a third of their monthly pay.

I also suspect that the 10% that DID take the money and run, would most likely have left any way, meaning that they might have left if offered an even smaller amount, like say $500.

Also, even if someone took the money and left, it needn't necessarily be the case that he had joined the firm with money on his mind; he might not have liked the four weeks of training and gladly accepted some money (which might have rationalized or legitimized his decision) to leave.

frankenduf

investment banks do the same thing- if their CEO presides over an 8 billion dollar loss for the company/shareholders, they will be offered 120 million dollars to walk away- apparently, 90% of CEOs accept the offer (the other 10% wait to get placed into government contracting positions, where their losses will be diluted at the taxpayer trough)

Allison

Have any of you ever had a call center job? First of all, you don't make $3000 a month (at least in Portland). It's more like around $1600. Call centers have insanely bad turnover. I worked in one for just over two month - there were new hires every single week but the business was not expanding. People were quitting every couple weeks in droves large enough to require hiring 10 people every week. The hours are miserable, the working conditions, worse, you're constantly surrounded by chatter that invades your brain.

A CSR who is not "in it for the money"? Of course you're in it for the money, the job is awful. Unless Zappos is magically the best call center in the history of call centers, those people refusing the bonus are nuts.

sygyzy

More than a few people have suggested that this idea may be ripe for abuse. That people would spend four weeks (160 hours) of their life in training for the money.

I absolutely disagree with this notion. First of all, the training is not valuable to anyone but a potential Zappos employee. Knowing how to recommend an alternative pair of shoes won't help you in any other job. And who has time to waste 4 weeks of their time to pull off this little "scam"?

Tony

There's gotta be some kind of asymmetric information issue here - as word gets out that this is the norm, they will get more applicants who don't want the job, but want a quick 4 weeks training pay + $1000 bonus. It'll make their hiring process more inefficient.

HL

So many bitter people commenting! Whatever Zappos is doing, it must be working. Their customer service and corporate culture is wonderful, and I'd not consider buying shoes anywhere else.

Having their CEO and several employees on Twitter, all of whom interact in fun and unusual ways with other Twitter folks, is a great thing. Maybe it's just a marketing tool, but they genuinely seem like nice people who are doing what they love.

Can YOU say that about your job?

Munic

They do this because its hard to fire people when their heart's not in it. I've been fired in the first few months of 2 jobs for being unenthusiastic. One time, they said they were laying me off 6 weeks after hiring me, and they would have had to pay unemployment if i'd filed. The other time, they monitored my calls until i made a "mistake". This "mistake" was absolute b.s. If i wanted to, i could have talked the other employees into hating the bosses who railroaded me. If the company did that to too many people, it would destroy morale and they'd be constantly hiring new people as others quit. That 4 week training session probably costs the company at least 2000 bucks.

And I agree with that early poster who said the tactic won't work now that its been publcized.

Jim N

I agree with comment #9. I am a manager at a call center and we do our best to make it an environment people enjoy coming to. We also offer good pay and benefits. We don't do the $1000 thing, but we do have double the typical retention rate for call centers. I could see how 90% would turn down the money.

Brian Miller

$1000 isn't really enough to see if people are in it "for the money". Even at minimum wage, it's easy to see that it won't take long to earn past $1000.

Offer $5000 or $10000, and then maybe we'll be talking about something interesting.

Clint

The comments above me are remarkably cynical! A lot of people are making some massive assumptions, especially not knowing what the benefits package is for working there, or the salary. A call center job does not have to be miserable; it is ususally the company's policies that make it so.