By Mark Wright, OD, FCOVD,
and Carole Burns, OD, FCOVD
Jan. 12, 2022
Hiring is in the top three issues facing practices today. What used to work in hiring isn’t working anymore. It’s time to try new and different strategies. A company called Trainual has a unique approach that we should consider.
We’ve all heard of signing bonuses. A signing bonus is a one-time payment of money when a person accepts a job with your company. The problem with a signing bonus is what is called in business “sunk costs.” A sunk cost (also known as retrospective cost) is a cost that has already been made and cannot be recovered.
Sunk costs should not, but often do, influence decision-making. Here’s an example of a sunk cost influencing decision making. If you’ve already paid a signing bonus, you may be more likely to keep an under-performing employee because you’re not going to get your signing bonus (sunk cost) back if you replace the under-performing employee.
Trainual, a software company in Arizona, takes the opposite approach and pays employees to quit. Trainual CEO Chris Ronzio originally offered new hires $2,500 to quit after two weeks if they had any doubt about working for the company. Not one of the 38 people they hired since implementing this policy have quit. In fact, this policy is working so well that the company recently raised the amount to $5,000.i
Ronzio said the strategy has helped the company keep top talent, maintain a strong company culture and quickly assess new candidates to see how dedicated they are to the company by allowing them to throw a red flag if they are feeling anything but excited about being a team member at the two-week mark.
Rozio’s approach flips the scrip onto the employee. The employee makes the decision to stay or go. Let’s say that in your practice your average employee salary is not as high as in Rozio’s company, so you offer new hires $500 if they leave the practice within two weeks of their new hire. The new employee, by their decision to take or leave the $500, is telling you how dedicated they are to your practice.
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The two-week time frame is important. That’s long enough for the employee to get a pretty good feel for what it is to work in your practice, but not enough time to really make a difference if they leave. It is enough time for the new employee to determine if they want to commit to your practice. This is information you want to know sooner rather than later.
This approach also holds the hiring team responsible. There is a cost to the practice if the wrong employee is hired. It tells you if the hiring systems in place are working well or need to be redesigned.
Ultimately, paying new hires to quit within two-weeks has the positive impact of sending a powerful message about the practice’s culture when people turn down the cash, opt in and commit.
Is the magic number $500 or some other number? You’ll need to make that determination for your practice through trial and error.
The main idea here is to create a system that enables you to determine if the new hire is worth all the effort to keep them, train them and invest in them.
References
i. https://www.businessinsider.com/trainual-software-ceo-pays-employees-5000-quit-retain-top-talent-2022-1?amp
