Paying employees to quit

By Andy Welsh  |  2018-05-24T16:44:59

Being paid to quit

Sending or receiving an email like this may be a little unexpected, but paying staff to quit is an idea that’s actually been around for a number of years. For whatever reason, it hit the headlines around the world again in May 2018, with companies like Amazon and Netflix major proponents of its benefits.   
Figures publicised online by media outlets like provide an insight into why a scheme like this exists:
“In recent years, Australia has been said to be in a somewhat of an employee disengagement crisis. A Gallup study of employee engagement in 2013 found that only 24 per cent of Australians are engaged with their job compared to 60 per cent who are not engaged. Another 16 per cent said they were actively disengaged. Disengaged employees are one of the biggest issues that your business can face, with Gallup estimating that actively disengaged employees cost Australian businesses between $33.5 billion and $42.1 billion per annum.” - Why Amazon pays staff to quit
So the rationale for the “pay to quit scheme” appears to be that disengaged employees are the problem and simply replacing them with new staff, will resolve the disengagement crisis in that department or organisation. Simple.
An alternative solution
Our response to any organisation considering a pay to quit scheme, would be to first ask:
Do you support a culture that provides employees with every opportunity to feel more engaged in their role and the organisation?
For those that do, a pay to quit scheme is definitely one way to quickly identify employees that aren't right for your organisation and to begin hiring those more closely aligned to your vision. But for organisations that feel as though they could do more to ensure employees are more engaged, there's some simple things that you can check on that can change things a lot! For example:
  • Are your leaders regularly talking to employees about what they feel is working well and not working so well?
  • Can employees see a way their ideas to improve the organisation or workplace can be heard right across the organisation, as opposed to going in a black hole?
  • Are teams able to really own their own improvement process?
  • Are your systems people-centric?

It's also worth remembering that there’s no such thing as an employee that is in some kind of binary, permanent state of "engaged" or "not engaged". They'll be regularly moving around on a broad spectrum, with differing levels depending on the metrics that are important to them. Having systems in place to spot signs of trouble or disengagement within one of these metrics early, can prevent things escalating to the point that they are regularly disengaged in all areas and/or considering their position. For example:
  • Peers? They enjoy working with their colleagues.
  • Fulfillment? They love what they do.
  • Communication? They're starting to feel left out and a breakdown in comms is harming sales.

In short, do everything to foster engaged employees, before paying disengaged employees to quit.