You know you're at the top of your game as a corporation when you can offer your employees thousands of dollars to quit and you still have a workforce a week later. But that's just what Amazon is doing: they're offering warehouse employees up to $5,000 just to walk out the door - not because the company is downsizing, but because they want to make sure that everyone who works there actually wants to work there. It's a pretty ballsy approach to human resources, but it must go a long way to dealing with employee complaints.
So this got me wondering: how much would your firm have to pay you to just quit? No strings attached, no non-compete, you could take the money and go to work for the firm across the street tomorrow. I'm betting that for most of you the number would be higher than $5,000, but there definitely is a number. So what is it?
Just to make things a little more correlative (and a little more anonymous, just in case), what percentage of your all-in comp could they offer you that would make you high-step it on out the door? For example, would 5% do it ($10,000 cash on $200,000 all in)? 10%? More? Or do you hate your job enough to take even less?
An even more interesting discussion might be: should the banks be considering this? Think about all the guys in the business who really hate their job and are just there for the money. Wouldn't the firm be better served replacing people like that with folks who actually want to be there? With the desk pressure in banking it would probably take about three hours to fill all the newly-vacant slots.
It's an interesting approach. I made some pretty sick dough at my last firm, but I hated every minute of it. I think if they'd offered me 5% I probably would have taken it. If they'd offered me 10% I know I'd have taken it. So what would it take (percentage wise) for you to un-ass your desk?
I don't think this would work for banking, because people that don't particularly like the job are often doing it for the exit opps, not the immediate paycheck. Therefore, few people would take this option until they did their 1-2 years as an analyst and have their next job lined up. Hence, paying them extra when they quit would have little upside for the bank.
As for me personally, I really like my job, so I probably wouldn't quit unless the amount offered was sufficient to finance a good MSF/MBA.
I think 25-35% is probably my number. It would give me about a year to do some side projects, coach, and figure out what direction I want to take after that. I can see myself doing that without the payout but at that level I could almost make a snap decision and walk out.
I feel like it'd be a ballin' way to quit if you worked for a BB and were just lateraling to another. Love to get me an exit bonus
He borrowed this from Zappos (which he bought). They do this as a part of their interview process. They offer you the job and at the same time offer you a month's salary to not take the job.
Not sure how this would work in Banking, Accounting, Law Firms, etc. Would a certain number of people leave? Yes. But I am not sure those that hate banking would all leave because they know that they have to stick out a number of years in banking to become more valuable in something they would rather do.
Like... $5 and a pack of cigarettes.
only if it's mild sevens.
What's the time frame you have to decide by? If I knew this was coming once a year and I wanted to leave anyway, I would just get the other job offer and take the money from Amazon anyway. I'm assuming there are some strings attached they aren't mentioning.
Agree with @"CorpFinHopeful" and @"AcctNerd", most (junior) bankers and professionals in general would not take anything except a stupidly high amount (multiple times salary) just because the reason they're putting up with the bottom-feeder crap today is they realize if they work hard now it'll pay off big someday down the line. Therefore if you want it to pay off now you'd have to PV expected salaries for years to come ... and probably find a terminal growth rate for once you found the job that you'd stay in for a decade or longer.
You know what they say, everybody's a free agent come January. I had a friend give her notice only weeks before bonus season--she hated it so much she couldn't even stick it out long enough to get it. Me, I guess 50 percent.
What a dumb bitch
For finance this is not a great strategy but for a warehouse worker it may work.
Looking at Wall Street, the people who know they are doing well/going to get promoted/have better options are not going to throw away all the legwork they put in.
However, if you get closer to a full bonus payment as severance then you'd see more high performers walking.
Going to go with in the flesh and say anything 50%+ comp and lots of people will consider.
If my boss walked up to me right now and said, " I'll give you x to quit right now." It'd probably be somewhere around 75 to 100%. If I knew it was coming, that number would shrink substantially because I would be able to at least prepare myself for what was coming.
10-15%. You accounting guys wouldn't do this, srsly? I woulda been on that like white on rice when I was in Big 4. Even if only to lateral move a month or two later.
about three fiddy
About fiddy cents
1 year's per-tax salary AFTER tax.
I don't see the upside in this. All of the best employees who were looking for a catalyst to pursue other opportunities are going to leave and have a mini-vacation with the ~$3500 after-tax treat from Bezos. The lazy, lower quality workers are going to stay because they don't have an alternative.
This is one of the most interesting things you'll ever hear about life as an Amazon.com warehouseman (though they never come out and say it's Amazon for legal reasons):
This is amazing. Everyone should listen to this.
For me its more about the growth, experience and exit ops right now. And since I'm moving up pretty quickly it would have to be quite a lot. Probably a 100% or more at this stage of my career. If you start hitting a ceiling or are at a level where laterals happen quite often its probably a different story.
Depends on the market rate of a luxury yacht at the time of the 'leave' offer.
Pretty neat idea. Can see it working for roles with not much progression, not really for finance with the exception of back office. Imagine if we had IT guys that actually liked their jobs? Shit would get done around here!
I mean, this system largely already exists. with the exception being that the employer - in lieu of the employee - decides whether there is another more productive replacement, viz., severance compensation. Even when offered this "unearned compensation", many bank employees elect to voluntarily resign (forgoing severance pay) so as to avoid the blemish of involuntary termination.
The argument that banks should switch to the "Amazon system" hinges on the assumption that the employee is more capable of determining whether another candidate would be more productive in his role than is the employer. and that this faculty overwhelms any uneconomical decisions it may tempt him to make.
Assuming that's a rather dubious proposition, it seems Amazon would very much prefer to implement the "bank system", but it would undertake costs that the banks do not when making termination decisions. My best guess is that because Amazon employs so many more workers, the costs associated with identifying underperforming employees exceed the potential savings from hiring more productive ones. It may have an additional incentive, viz., the ability to terminate large portions of its workforce without incurring severance costs (given the amount of temporary employees Amazon hires around the holiday season, I suspect this plays into the math as well). Thus, in Amazon's case, it is more profitable to outsource the determination re: employee productivity to the employees themselves.
I don't have a SB to give, but I think this was a very insightful comment.
I think he thinks that the warehouses have a morale problem. He figured 10-20% of warehouse employees are unhappy and he's paying $500-1000 per employee (a month's salary at the most) to remove the malefactors.
For reasons that us Wall Street people don't understand, correcting this morale problem will help the business more than the cost.
My view is that this is simply a morale problem, not some underperformance problem. (Remember these are hourly employees who don't get paid bonuses). Bezos doesn't want people to feel forced to work there so he is offering people a really big severance if they want to take some other $10/hour job- or even a minimum wage job that they enjoy more.
Apparently I'm a Chicago-schooler now. Every week a new charge. What school shall I be thrown in with next week!?
Ah yes, Jeff Bezos can't be explained by any silly "UChicago analysis", but it's no problem for the explanatory powers of @"IlliniProgrammer"! Don't sell yourself short; the rest of "us Wall Street people" might not understand this, but you seem to have a firm grasp.
I'm not sure, but I'll bet it's much simpler than that. He wants the miserably unhappy employees to have the freedom to leave and not worry about how they're going to pay for dinner tomorrow. If they'd rather spend a year working for $8/hour at Wal Mart than another year working in that warehouse, the $5K check would more than cover the difference.
I don't have an explanation for what Jeff Bezos is doing. I know he's done a lot of stuff that's completely flown in the face of conventional business wisdom, but worked out in the end.My guess is that it has something to do with morale and the fact that sometimes a business is worth more than the sum of its parts. After a track record like his, on something where reasonable folks can see at least one step of the way to how these intangible issues might create tangible value, I'm going to give him the benefit of the doubt.
Amazon ultimately competes on delivery and execution. You need a well-run warehouse to do this. To frame this another way, there may be an alternative explanation to the silliness of $10/hour warehouse workers expecting to get something on the order of a $5000 bonus at year-end: Bezos is a confused liberal who thinks he's pulling some sort of Henry Ford stunt at the expense of shareholders.
Yes, that is precisely what I was suggesting...
I won't disagree with your angle; your guess is as good as mine as to Bezos' motivations. But I do tire of being patronized by these silly straw men.
You berate me for my supposed fixation on "rational actors", then propose your own economically rational explanation. Despite your jabs, you and I both agree Bezos is acting rationally (in fact, the phrase "rational action" is pleonastic), we just disagree re: the ends at which he directs his action. "Intangible" factors are just as reasonable as "tangible" factors with respect to decision making.
In any case, it's not inspiring to have you beat up some absurd-sounding version of my point or dismissing me by association to this-or-that school of economics at the beginning of every response. I don't see what value it adds, outside of cheapening your argument.
I wouldn't take anything to quit- I'm in banking for the long run. It was never about exit opps for me- for me it's about the thrill of the deal and working for a top tier firm with an amazing culture.
It's cliche, but the chinese saying/proverb "If you love your work, you'll never work a day in your life again" rings true for my experience in IBD @ a top BB. You couldn't pay me to leave- I'll stay until they throw me out.
You, my friend, are an endangered species in this business.
From a banking analyst perspective, I think it obviously depends on timing. Right before bonuses hit, I obviously wouln't take anything less than that and would probably just prorate it going back. Interesting would be at the start of your second or third year as an analyst right after bonuses had hit. I'd probably walk away with anything close to 25% total comp
Probably 50% of my all in tax free... Which is what... 85% of a year all in? Fucking taxes man, fucking taxes
A multiple of my salary, for me it's about the long term. I'm in a good place, joining a firm with a good culture and a lot of opportunities for growth and moving up the ladder. It doesn't make sense to just take a few k when you have a high expected value.
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