WAIT, THIS IS ISN’T ABOUT ZAPPOS: But Someone Else Will Pay You To Leave If You’re That Miserable…

Remember a few years back when we all went gaga in HR about Zappos? When they were offering new hires getting ready to graduate new hire training a couple grand to leave if they didn’t think they were a fit?  You know you do.  You love Zappos.

HR people love them some Zappos.  I was at the WorkHuman conference put on by Globoforce a couple of months ago and a lady in the crowd asked a question and identified herself as being on the team at Zappos.

She got applause, people. She might be the Lebron James of HR, or she might be an undrafted scrub that’s about to be fired for harassing a male intern from UNLV. Either way, the crowd applauded her.  Because she was Zappos. Think about that and let it soak in a bit.

Well, as it turns out, there’s another interesting application of the Zappos “I’ll pay you to leave” offer.  Zenefits, another darling of sorts in the HR world (“Look Mom—a free HRMS! All we have to do is allow them to sell us benefits!”) is in the Zappos game of paying people to leave.

Before we talk about the Zenefits offer, click here if you need a refresher on how Zenefits has imploded in the last year – bad processes, pissed off ADP, CEO fired, etc.

OK – caught up?  Things have been bad at Zenefits, so it’s pivot and survive time.  With that in mind, new Zenefits CEO David Sacks made a turnaround move that appeared to be one of the more ballsy ones involving people in Silicon Valley history a few weeks back.

Following several months of turmoil over compliance issues that led to the departure of the company’s founder in February, Sacks made what he called “The Offer.” In essence, any employee hired before February could take a generous buyout offer if they didn’t feel they could get behind his plan to save the company (2 months pay and 4 months COBRA).

Here’s a take from VentureBeat on that offer, then a response from Sacks on how the offer went:

“And it is a remarkable dare that has put the entire future of the company on the line. In fact, in throwing down this particular gauntlet at this particular moment, Sacks is taking a risk that could torpedo the entire company.”

The deadline for accepting the offer was last Thursday. So how’d it go?

Today, Sacks revealed in a series of tweets:

No doubt, the 100 or so of the 1,100 employees who took the buyout will leave some holes to fill.

Still, it seems the bet paid off. And if Zenefits continues its comeback, Sacks’ moves in recent weeks will likely be remembered as one of Silicon Valley’s more amazing winning gambles.

My take? You offer two months pay and lose 10% of your workforce.  That’s good, because only the people who were least engaged are gone – or those who were close to accepting another offer anyway.  It’s good to get those folks out.

But were the people who failed to take two months pay really recommitting to Zenefits?  I don’t think so – two months pay for active employees is hardly an offer you can’t refuse.  My take is the purge, while good – wasn’t great.

It wasn’t ballsy at all, it was pedestrian. Offering two months salary is smart, because only the dregs of your company will take that.

And the Zappos lady who got applause for being at Zappos? I gave her a standing O that day. I celebrate her entire catalogue.  I just hope that intern made out OK.

FOT Background Check

Kris Dunn
 Kris Dunn is Chief Human Resources Officer at Kinetix and a blogger at The HR Capitalist and the Founder and Executive Editor of Fistful of Talent. That makes him a career VP of HR, a blogger, a dad and a hoops junkie, the order of which changes based on his mood. Tweet him @kris_dunn. Oh, and in case you hadn't heard the good word, he's also jumped into the RPO game as part owner of a rising shop out of ATL, Kinetix. Not your mama's recruiting process outsourcing, that's for sure... check 'em out.

2 Comments

  1. Great article Kris. I have to agree with you that 2 months is hardly an offer you can’t refuse. Depending on your role and experience level, 2 months salary may not be enough to hold you through until you find a new job, or at least not your dream job.

    So the employees who left are either the least engaged or the biggest risk takers. Hopefully those that stayed are really aligned with the new mission and not merely afraid to leave without another offer.

    Reply
  2. Phillip North says:

    I’m sure the inter will be fine…

    Reply

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