The policy of providing a let-out after one week has gained worldwide attention. Columnist Keith McFarland explains why it makes sense

by Keith McFarland

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I met Tony Hsieh, CEO of billion-dollar e-tailer Zappos, on a shuttle bus at a CEO conference a connect of years ago. So I was interested when Bill Taylor posted a piece on Harvard Business Online about a startling hiring practice at Zappos a few months rear.

Yes, the company’s breathless chase of the eventual customer actual trial is the eat greedily of legend. Zappos offers extremely fast shipping at no cost and resoluteness cover the return shipping if you are dissatisfied for any reason at any time. Customer be in action reps are given a lot of leeway to make sure every customer is an enthusiastic customer. The circle folklore includes an anecdote about reps delivering flowers to a customer whose mother had recently died.

But unruffled in light of Zappos’ patron service obsession, the practice Taylor highlights caught my attention. Apparently, whereas Zappos hires new employees, it puts them through an intensive four-week training program, immersing them in the company’s culture, strategy, and processes. Then, about one week in, Zappos makes what it calls "The Offer," telling newbies, "If you quit today, we elect pay you for the amount of time you consider worked, plus a $2,000 bonus." A BusinessWeek reporter interviewed Hsieh recently. He says only 2% to 3% of people take the give. The other 97% recite no have commerce—they choose the do job-work besides the instant cash.

On first reading about this, my inner cynic wanted to meet the HR folks who do the initial screening. Then I wondered grant that hordes of race are going to start queueing up outside Zappos headquarters in Henderson, Nev. I mean, what’s to keep every in one’s teens hopeful with gas money to roll in, attend part of the training, and head down the highway to the casinos with $2,000 in his pocket? It will be take an interest to see what the stroke of word-of-mouth choose have on this odd HR process.

That said, the customary course clearly says something about Zappos’ confidence. How many of us run companies where, if we offered new hires a week’s salary plus $2,000 to leave, we would enjoy a 97% stick traduce? Zappos is betting real money that the heat of imagination and esprit de corps of its enterprise presents a compelling value proposition to employees. I’m impressed by what the practice says nearly the closeness of Zappos’ commitment to protecting and advancing its workplace environment. It is single thing to tell employees: "Our corporate culture is our brand"— it’s not the same thing to cash out recent hires who do not reflect that culture.

Zappos is acting upon the body the understanding that the symbol of a company can be the most powerful yet most unyielding competitive advantage to develop and maintain. "The Offer" suggests a rare company that believes on the supposition that you actually want to amaze your customers, a bulky distance to start is to amaze your employees and inspire them to amaze everyone who comes in juxtaposition with your enterprise.

And even from a financial standpoint, the exemplar makes increasing sense the more you think about it. Most CEOs agree turnover costs tens of thousands of dollars in recruitment, training, and dissolute productivity. So identifying the misfits early—at a require to be paid of right one-week’s salary and $2,000—could just be the best deal a company can make. What would you remunerate to get a full-time, weeklong look at your recruits’ character, work habits, and social skills prior to construction a commitment to them?

It seems to me that this practice does one other creature as far as concerns Zappos that might exist the most important: Zappos is forcing itself to finish a good job filtering humbler classes on the obverse end, and creating a place where people failure to work. The day that Zappos loses its edge, it will attain to itself writing a lot of checks.