Would You Pay Bad Employees $3,000 to Leave?

Would You Pay Bad Employees $3,000 to Leave? | LinkedIn.

By Todd Palmer

The average cost of making a bad hire, according to 41 percent of companies surveyed by CareerBuilder, is $25,000. The survey — conducted among 2,696 employers between Aug. 16 and Sept. 8, 2011, by Harris Interactive — found that a single bad hire can significantly affect an organization’s bottom line.

A bad hire can be measured several ways, including:

• Less productivity – 41 percent
• Lost time to recruit and train another worker – 40 percent
• Cost to recruit and train another worker – 37 percent
• Employee morale negatively affected – 36 percent
• Negative impact on client solutions

One company, online retailer Zappos, is getting a lot of attention by paying new hires — potentially before they become bad employees — $3,000 to quit their job with Zappos. In the book Delivering Happiness, by Zappos CEO Tony Hsieh, he outlines the process of new employees receiving “The Offer.” Zappos offers new hires the wages they have earned for the hours they have worked during their initial training period, plus an additional $3,000 to leave after, their initial training period. This offer is offer expires within 24 hours of being offered. Hsieh says only 2 percent to 3 percent of people take the offer. The other 97 percent say no — they choose the job over the instant cash.

Considering the cost of having a bad employee, this program makes a lot of financial sense. Zappos is able to quickly identify employees, who by their willingness to accept the $3,000 offer, self-select out of the company, at a relatively low cost. By removing an employee who doesn’t want to be a part of their organization, Zappos saves on future hassles and headaches that far exceed the money paid to the employee, as they exit stage left.

I believe what this process has done for Zappos is to help them truly define, in the early candidate screening stages, what a good employee looks like for their culture. By putting the burden of successful recruiting upon their Human Resource department to select new employees who will be a good fit, front-line managers will have an easier time of retaining talent by creating a place that eager employees want to work.

EO Detroit “Stick’s With It”

On September 25th, some 58 business owners – all members of EO Detroit – gathered in Downtown Detroit, to engage with Lee Colan, celebrated author of 12 books and advisor to America’s leading businesses.  Overlooking the beautiful waterfront of the Detroit River, the event was structured around Lee’s Adherence Equation that has helped small and large business alike consistently execute their plans:  Focus x Competence x Passion.

Lee says, “A good plan gets you into the race, but excellent execution propels you into the winner’s circle.  The Adherence components of Focus, Competence and Passion help a entrepreneurs work on the business to create a scalable operation and sustainable growth.”

Scott Rice, of PowerLink Facilities Management, and Day Chair for the event, said of the event “To me the definition of a great event is a high energy speaker like Lee Colan with great takeaways, a venue like the riverfront and great fellowship sharing a meal with other EO’ers”

All attendees walked away with actionable takeaways for their companies – with the goal of elevating their team’s level of achievement.

Entrepreneurs’ Organization Detroit Names Board Members

Southfield-based Entrepreneurs’ Organization Detroit, a chapter of a global organization that works to enrich members’ lives through direct peer-to-peer learning, connections to experts, and once-in-a-lifetime experiences, has named its 2014-2015 board members.

Comprised of metro Detroit entrepreneurs, EO Detroit’s board members will serve a one-year term during which they will be responsible for fostering growth and development between new and current members to ensure the organization’s success. EO Detroit now has 129 members, generating $1.4 billion in sales and employing more than 7,500 employees.

The 2014-2015 board members include:

• Brian Hare, owner at Raflaski Hare PC
• Eric Banks, executive principal and partner at CORE Partners
• Mark Winter, managing partner at Identity
• Bob Kuehne, president at Renaissance Science Corp.
• Scott Wolfson, founding member at Wolfson Bolton PLLC
• Matt Wolf, partner at Wolf-Chandler Agency LLC
• Scott Rice, COO at Powerlink Facilities & Construction Services
• Brian Dietz, president at Dietz Property Group
• Kristen Tassielli, Fitness Thing Inc.
• Tyla Wells, owner at Our Spirit LLC
• Joe Wichowski, president at Traction Consulting Group
• Matt Farrell, executive principal and partner at CORE Partners

Established in 1987 as a catalyst for entrepreneurs to learn and grow from each other, EO is a global network of more than 8,500 business owners in 40 countries. Together, these entrepreneurs account for $160 billion in sales and oversee 1.7 million employees.

Entrepreneurs’ Organization Detroit Names Board Members

EO Detroit Sponsor Spotlight – Jaffe Raitt Heuer & Weiss

Jaffe Raitt Heuer & Weiss has been trusted for many years to provide strategic legal advice to entrepreneurial businesses and business owners.  We are consistently recognized as one of the most respected firms that can help mid-sized businesses build value and grow.

A longstanding supporter of EO, Jaffe attorneys serve the day-to-day business and transaction legal needs of a variety of clients whether local to Michigan or located across the country ranging from development stage entrepreneurial businesses to mid-sized companies experiencing rapid growth.

Beyond the business needs of any client, we help clients facilitate wealth preservation and transfer.  Our estate planners work closely with you to offer a complete package that includes planning for marriage, divorce, retirement, disability and death.

We identify and provide creative solutions for our clients in light of the myriad factors affecting their businesses at any given time.  We advise clients in forming business entities, facilitating and executing sound growth and expansion opportunities, while developing and imple­menting their exit strategies. We are experienced in negotiating, drafting and reviewing agreements of all types, including employment, distribution, manufacturing, licensing, buy-sell, lease and security offerings.  Jaffe also counsels clients on financing through loans, private equity and venture capital.  Often we make introductions to these various funding sources.

Our lawyers regularly advise on technology licensing, transfer and collaboration arrange­ments for clients across a wide array of industries.

Our sophisticated experience in mergers and acquisitions extends to both public and private com­panies supporting a wide variety of middle market transactions. We expertly negotiate and structure mergers, stock and asset purchases and divestitures (both tax-free and taxable), spin-offs recapitalizations and management and employee buyouts.

In conjunction with our highly specialized tax attorneys, our team develops creative strategies designed to maximize the economics of each transaction and navigate the complex issues that arise in virtually all transactions.

The attorneys at Jaffe are experienced in developing creative strategies designed to navigate the issues that arise in all phases of these transactions and maximize value for our clients. We are sensitive to the issues of family-owned businesses looking to partner with private equity investors to sell a minority or controlling interests in their businesses while protecting the value created by their entrepreneurship.

Our Team

Jaffe attorneys leverage their extensive experience and expertise to provide pragmatic yet innovative counsel that helps owners and management tackle business issues or opportunities to achieve their objectives.  We share our clients’ entrepreneurial passion and deliver responsive representation.

The Jaffe team is also accustomed to bringing their skills to bear on transactions involving private and public enterprises. For the past 3 years, transaction engagements with Jaffe clients were recognized by Crain’s annual M&A Awards.

In addition to providing timely advice and practical solutions to clients facing a wide variety of legal and business challenges, Jaffe attorneys provide general counsel advice for all types of businesses at all stages of business growth.  Our team of integrated attorneys works alongside business owners and their management team to help them understand and manage the legal issues that impact their business.

Members of the firm have lectured extensively across North America and have contributed articles to many professional and academic journals.

Our breadth of experience, highly specialized expertise in business, corporate and commercial law, and innovative approach allow us to expeditiously solve our clients’ legal challenges and add significant value to their business endeavors.

To discuss your business further and explore how Jaffe can help, please don’t hesitate to contact:

Aaron Sherbin, Partner asherbin@jaffelaw.com Mobile:  248-672-6660

Alicia Schehr, Partner aschehr@jaffelaw.com Direct:  248-727-1448