Cash payouts: Should we be bribing new recruits to stay?

over 1 year ago by Sophie Stones

Cash payouts: Should we be bribing new recruits to stay?


Earlier this year it was revealed that social workers in York are to offer what they call “Golden Hello’s” and “Golden Handcuffs”. The scheme that will see new starters get a payout of £2500 to take and stay in their new job, whilst existing staff receive the same amount to commit to 2 years or more, has been suggested in order to address the dire staff shortages faced by the industry.

Whilst offering employees cash to stay may be seen as a frivolous expense, these golden offers could actually save money, with the York department already on course for an overspend of £182,000 due to agency staff expenses and a £30,000 six month long recruitment campaign that saw no new hires.

Once implemented, York will join a path already followed by social workers in Sheffield, Rotherham and Barnsley. However social work isn’t the only sector to offer cash during the recruitment process. A structure that is integral to the way they work, Zappos have implemented ‘The Offer’ for almost a decade now.

An online shoe company, customer service is fundamental to Zappos, with their employees often hitting the headlines for going above and beyond for their customers. This association means that finding the right cultural fit during the hiring process is vital; just one of the reasons ‘The Offer’ is employed. Following a four-week training period, in which employees are paid a full salary and are immersed in the culture and work environment, new recruits are offered a sum which started at $100 and now totals a month’s salary, to walk away from the role.

This offer according to CEO, Tony Hsieh, ensures that only those employees who are truly committed to the company progress to full-time employment.

After acquiring Zappos, Amazon CEO, Jeff Bezos decided to implement a similar process across both companies. In a 2014 annual letter to shareholders he revealed his ‘Pay to Quit’ plans, which along with a new starter incentive, also includes a $1000 ‘quitting bonus’ for all existing employees once a year. Stating that “in the long-run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company”, Bezos’ scheme hopes to address employee happiness, in a company that can at times be challenging.

As with the Golden Handcuffs scheme, the ‘Pay to Quit’ plan could not only be saving Amazon money but actually earning them money, with Gallup finding that companies with employees who are engaged at a level of 9.3 or higher see 147% higher earnings per share than those with disengaged employees.

What’s more experts have suggested that paying employees to leave could actually be helping employee retention, meaning that those who’ve turned down the cash payout will be less likely to up and leave after a few months, feeling they’d have wasted the money and will consequently try harder to enjoy their job.

The cash incentives, whilst becoming more popular, rely on an already existing culture to maintain they aren’t simply a bribe for staying in a toxic environment. So whilst they might at first seem golden, they might later just be handcuffs.