- 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 business owners in a wide range of industries have struggled to find and retain staff amid a nationwide labor shortage.
In November, a record 4.5 million Americans quit their jobs. In many cases, people have cited poor working conditions and low pay as factors.
In an attempt to secure workers, businesses have been hiking wages, offering hiring bonuses, and education benefits to attract more staff. But even amid these changes, the labor crunch is still persisting into the new year and a study conducted in November 2021 suggested the problem may continue beyond 2022, despite employers' efforts.
One company, however, has found a novel approach to finding and retaining workers.
Chris Ronzio, CEO of Trainual, an Arizona-based software company that helps small businesses onboard, train, and scale teams told Insider he pays employees to quit. He said the strategy helps him keep top talent across the industry as well as maintain strong company 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 instituted the pay-to-quit policy in May 2020. At the time, the company was offering employees $2,500 to quit after two weeks if they had any sense of doubt. None of the 38 people they hired since the policy was implemented has taken the offer. The company has 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.
It also holds the hiring team accountable because there is a cost to the business if they get it wrong, Ronzio said.
The logic behind the two-week window is that there is less disruption 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 the employees who decide to stay? Ronzio said that employees don't receive any specific incentive for continuing at 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."