In 2016, BenchSci joined the Montreal-based startup accelerator FounderFuel. One of the mentors there recommended a great book to me called Delivering Happiness, which tells the Zappos story.
In the book, Tony Hsieh (who recently passed away), extensively documents Zappos’ unique culture. One interesting practice caught my attention: Zappos pays new employees $2,000 to quit after their fourth week at the company. Amazon, which acquired Zappos, implemented a similar program with two caveats: Amazon will pay you $5,000, but if you take the money and quit you can never come back!
When I first read about this, I found it interesting, but not immediately applicable to our small team at the time. It was only when our company grew to over 100 people that I understood why such a program is so important.
Within a few weeks you know if you made a mistake
I don’t think that an interview process exists that predicts with 100% certainty if someone is going to be successful in a company. While some interview processes are very intensive and include multiple rounds, personality assessments, case studies, and more, you can only truly know if you’ll thrive somewhere after joining. In addition, quitting is a very difficult and stressful process, especially if you want to quit a few weeks or months after starting.
The data for our company shows that is the case. While our team member churn is significantly lower than the hypergrowth tech industry average (25% voluntary churn in North America and 17.5% in Toronto), we have seen more people leave as we got bigger. While this is natural, what caught our eye was the number of people who left between their 8th and 12th month. More than that, from our exit interviews we saw that the reason for leaving was not something that happened recently. It was something they knew from their first couple of weeks here.
We have learned that while these people knew early on it wasn’t the right fit, they chose to stay because of financial concerns and how leaving early might look on their resume and LinkedIn profile.
This has a massive negative impact on the health of the new employee, those who work with them, and the company.
What Amazon and Zappos got wrong
Earlier this year, we decided to roll out a new policy called “Paid to Part Ways” that aims to solve this problem.
While we were inspired by Amazon and Zappos, we took what works for us and removed what did not. For example, Amazon’s policy says that employees that use it can never come back. To us, this seems counterintuitive (you want to make it easy for employees to quit) and spiteful. Our door is always open even if team members quit. And Zappos only pays team members $2,000 to leave, which we did not think was enough.
Finally, neither Amazon nor Zappos takes responsibility for their part of the process. What if the company decides to part ways with a team member? Why aren’t they paying them?
The BenchSci way: A full month’s salary to quit
After discussing this with department heads, weighing the pros and cons, and crafting a BenchSci-appropriate approach, we have launched an experiment with an even more ambitious policy than that at Zappos and Amazon.
Between new team members’ first month and the end of their third month, we offer them a full month’s salary to quit. We hope that will help them choose to part if they believe we’re not the right fit.
We also decided that new team members will receive this payment if their manager decides to let them go within the first three months. We believe that is fair as we also bear responsibility for making a mistake in our hiring process.
And, as mentioned above, this doesn’t preclude anyone from working at BenchSci in the future. We believe that companies, people, and circumstances can change. What’s wrong now may be right later.
Better mental health and strong ROI
A few weeks ago we had our first team member take advantage of the “Paid to Part Ways” policy. It turned a difficult and stressful situation into a much easier conversation. I would even argue that it reduced the anxiety that comes with quitting and improved the mental health of both team member and manager.
We also got great feedback from existing team members on the policy. They noted how stressful it is to join a new place with the fear of making a mistake and then bearing the financial impact of being between jobs, as it can take a few weeks to months to find a new one. Our new policy helps with that transition.
I also believe that in a time of remote interviewing and onboarding, such a policy is a must-have. How can employees truly get a feel for an organization, and vice-versa, through only remote interviewing?
I hope other organizations will offer the same perk to new employees, as we believe it will lead to better mental health. And if there’s concern about the cost, we can assure that the ROI is there as losing an employee after two months costs less than losing them—and everything you’ve invested in them—after eight.
So thank you, Tony Hsieh. It’s a great idea whose time has come.