Zappos.com sustains their culture while growing rapidly by offering new hires $2,000 to leave. Yes, that’s what I said . . $2,000 to leave.
The Internet clothing and shoe retailer reached over $1.9 billion in gross merchandise sales in 2009. Their growth is powered by service and a whimsical culture. Essential to this growth is attracting people to work there who find it natural, according to one of their core values, to be “a little weird at times.”
Zappos conducts a rigorous interview process, which includes an initial culture interview, followed by many conversations throughout the company to find just the right people who will fit in and, most important, feel at home in the culture. And while they do their best to get to know candidates during the interview process, once someone is invited inside, Zappos continues their quest to make sure that there’s a match between candidate and company.
Offering new hires $2,000 to leave if they don’t fit the culture is their litmus test to ensure that, well . . . the shoe fits.
Only the Most Passionate Employees Should Stick Around
Zappos doesn’t want anybody sticking around who sees their role with them as just a job. They want people with passion who see Zappos as a vocation rather than work, one in which you just happen to get paid for. They see what they do as a quest to make the world a better place for customers, and they want to hire people who feel that way too.
So the company makes several offers during the four-week new-hire training period to say:
“Are you sure? Is this the place where you feel at home?”
And in true Zappos style, if someone does decide that the shoe doesn’t fit, the company makes sure that they’re paid for their time, that they leave with dignity, and that their decision is honored. Tony Hsieh, Zappos’s CEO, says:
“We want people who are eager to live the Zappos lifestyle and promote the Zappos culture—not a typical nine-to-five office employee.”
Fewer than 1 Percent Take Zappos Up on the Offer to Depart
In 2010, fewer than 1 percent of new hires took Zappos up on their offer. That means that those who stay are committed and passionate. As a result of their interviewing and training process, Zappos is an electric place, filled with people who want to be there. It’s filled with people who are encouraged to bring out their inner whimsy. The IT crowd holds parades in which they dress as bugs because their quest is to stamp out computer bugs.
Where “Zapponians” work is filled with karaoke music at lunchtime and people who couldn’t imagine being anywhere else or doing any other thing. Selling to a fiercely loyal customer base of over 10 million paying customers, the company can boast that on any given day, approximately 75 percent of their sales are to repeat customers.
And they keep screening for culture fit, all the way through a new employee’s orientation. They let people opt out of their new job by offering them $2,000 for their time if the new hire believes they can’t be passionate about the culture and job they were just hired for.
Beloved companies are filled with people who love what they do. Is yours?
How do you screen people during the hiring process to ensure that they possess your core values?
Do you help people gracefully exit your company if they don’t fit your customer culture?
Karaoke Photo via Shutterstock
This is a great example and I feel like many companies should take their 90-day review as a similar opportunity. Let the employee leave if they want. No black mark on the resume. Make sure they get their last paycheck. You many not even need to offer a cash reward as long as you’re open and take away the perceived pressure created by “quitting”.
Very insightful article. This reminds me of a Confucius maxim that’s still very much on the tip of my tongue.
I love that concept, though it’s no surprise that Zappos does it. For those of us with smaller businesses, I think often it’s fear of getting rid of an employee that does so-so rather than purging him to find someone who’s a better fit. Who will do the work in the meantime?
Michael Vaughn
It is great that Zappos believes so strongly in their culture. They are definitely right though – culture makes the difference in modern marketplace where engineering can make processes efficient as possible and patients can easily be gotten around with a very simiple change to the process. Company culture is the key to success for almost all great modern companies. Consider Google for example. Everyone wanted to work there for the longest time – they played just as hard as they worked and everyone had a great time. Some of their most successful products came out of the work Googlers did on their free time on the company’s dime. It may seem wasteful but it breads innovation and works. However, there are some companies with great cultures you may overlook. For example, South West Airlines came out of nowhere in the 90’s, put their employees first and the customers and bottom line benefited. Bottom line: happy employees are more profitable employees.
Robert,
Love your point about making the check in not only about performance, but about culture fit. Too often culture fit is not even a part of the conversation, but rather about how people are executing a set of tasks. This salient point is one everyone should consider!
Susan,
What’s interesting and proven time and time again – is that having employees hanging around who don’t fit or don’t want to be there – actually drag down the productivity of others. So while you take a “hit” on the work someone is doing – long term your business is better. What we have found is that once you have a company full of culture rich and culture specific team members, they will help you identify those who don’t seem to fit. These companies are also best at having employees who want to be with you waiting in the wings — often the recommendations of those who work with a company that know how to spot people who “fit!”
Robert,
You mention Southwest. I’m in love with them. In fact Colleen Barrett who was their president wrote the forward for this book where these posts take their inspiration “I Love You More than My Dog: Five Decisions that Drive Extreme Customer Loyalty in Good times and Bad.” They live and breath trusting and enabling employees to bring the best version of themselves to work!