Says it’s helped him retain top talent
- Trainual is a software company that takes an unusual approach to staff retention.
- The CEO told Insider that paying new starters to leave helps maintain a strong company culture.
- “It’s a powerful thing for them to turn down the cash, opt in, and commit,” he said.
Many entrepreneurs across a wide range of industries have struggled to find and retain employees amid labour shortages across the country.
A record 4.5 million Americans left work in November. In many cases, people cited poor working conditions and low wages as factors.
In trying to recruit employees, companies raise wages by offering hiring bonuses and educational benefits to attract more employees. But even with these changes, the employment crisis continues into the new year, and a study in November 2021 suggests the problem may persist beyond 2022, despite employers’ efforts.
One company, however, has found a new approach to finding and retaining employees.
Chris Ronzio, CEO of Trainual, an Arizona-based software company that helps small businesses introduce, train, and scale teams, told Insider that he pays employees to leave.
He said this strategy helps him retain the best talent in the industry as well as maintain a strong corporate culture.
“With today’s market, hiring teams have to move quickly to assess candidates and get them through the process to a competitive offer, so it’s impossible to be right 100% of the time,” Ronzio said.
He added: “The offer to quit allows the dust to settle from a speedy process and let the new team member throw a red flag if they’re feeling anything but excited.”
Ronzio introduced a pay-to-quit policy in May 2020. At the time, the company was offering employees $2,500 to leave after two weeks, if they had any doubts. None of the 38 people who have hired since the policy was introduced have taken advantage of the offer. The company recently raised the amount to $5,000.
“We looked at our average salary when we considered changing the amount and ultimately figured that if somebody is making $80,000 or $100,000 a year, then $2,500 might not be significant enough,” Ronzio said. “They could decide to stay while they look for another job because they’ll make more staying. So we adjusted the number with that in mind.”
As an employer, Ronzio said he’s responsible for building an inclusive culture. He believes that giving employees a financial incentive and the power to “fire the company” sends a compelling message in culture building. “It’s a powerful thing for them to turn down the cash, opt in, and commit — and it sets the stage for a great working relationship,” he said.
He added, it also holds the hiring team accountable because there is a cost to the business if they get it wrong,
The rationale behind the two-week window is that there are fewer interruptions to the business than there would be after a longer period of time when the company has invested more in the employee.
But what about employees who decide to stay? Ronzio said that employees do not receive any specific incentive to stay with the company.
Those who refuse the $5,000 miss out on something ‘extra’ at this point in the timeline, because they believe the long-term value of sticking with us is worth much, much more.”