We Paid People To Quit And Here's Why You Should Too

I've always read about companies that pay people to quit. The idea is that you want people to take a moment, think hard about what they really want, and consider the offer.

A company doesn't REALLY want people to take the offer - they use it to create a fork in the road for people to stop and think about their career.

When we saw a 30% drop in cross-border shipments and the borders close in April 2020, we needed to make some tough cost decisions, and we wondered if now was the time to consider this idea. Unprecedented times call for unprecedented ideas!

We consulted with our lawyers and drew up a plan to offer severance based on tenure - we wanted it to be as generous as we could all things considered.

On a Monday morning, I put the offer out on Slack and left the offer open until the end of day Friday... and waited...

We had our first response within 20 minutes... Yikes! And then another a little bit later... And then they trickled in each day until Friday.

All told, by the end of the week, we had 14 people take us up on the offer.

Some of the people, I was surprised about, others I wasn't surprised. For some context - we've been in business since 1979 - and we have amazing people, many of them who have been with us for 20+, 30+ years. I realized after a few discussions with people that some of them were close to retirement or had considered it or wanted a complete change, didn't like working from home, etc., and this was the fork in the road they needed to make the change.

We did this via salary continuance, so they are still being paid today even though we did that back in September.

When people choose to leave your company, it can be emotional. I wondered if we had failed them, I wondered if they'd be upset, etc. We don't want anyone holding a bad opinion about A & A, no matter what the circumstances are.

But what ended up happening was really heartwarming. We had people send amazing messages out to the whole company about their experience with A & A, their fond memories, the lifelong friends they had made, how to keep in touch, and some fun stories of things we did throughout the years. Of course, we also had people who didn't say anything at all, everyone is different and entitled to their own style. I also learned that because of the uncertainty in the industry at the time, people were concerned for their own jobs and thought that this was a bit of a guarantee - and this made me think I could have done a better job at communicating that we weren't planning on any further workforce reductions, etc.

As we were going through this, I kept thinking "Wow, the only way someone could really retire here is to just quit and walk away with nothing. The only way they can get a payout would be to get fired!" Instead, our offer gave them the option to retire with a pseudo pension.

I had a follow-up conversation with someone who took the offer, and they are happily playing golf, gardening, and enjoying having a life-long weekend.

We may consider this offer every few years or so because we learned a lot.

Some Pros:

• It's the ultimate litmus test for your culture and how your people are feeling. (Also see this more recent article about Basecamp offering buyouts, and about 1/3 of their company took them!)
• It offers longer-tenured employees a bit of a golden handshake and to enjoy some paid retirement.
• It forces your people to really think and provide a vote of confidence "YES, I like what I'm doing here, and I want to stay."
• It also helps your people take control of their career, look at other options, look at bigger picture issues "Do I want to move to another province/country, be in another industry? Do I really like it here? Maybe now's the time..."
• It allows you to offer other people more opportunities to learn & grow as they step into these newly available positions.

Some Cons:

• It can put some fear into the organization "Is the company in trouble? If people don't take this offer, will they start firing people?" (Communication needs to be clear.)
• It can send a bad message that we don't care about our people, just reduce costs. (This is why we need to pre-face it in regular times as 'We hope you DON'T take this offer...' - but we want you to consider it.)

Overall I would think that if a lot of people take us up on this offer, we have more work to do with our culture, we can always improve. And if not many people take us up on our offer, we must be doing a lot of things right.

Does your company offer voluntary departure? Have you ever taken it? Have you been at a company where you wish you were given this option?