Another Reason Amazon Is the Coolest

Amazon's "pay to quit" offer is genius.

Apr 13, 2014 at 10:30AM (NASDAQ:AMZN) seems to be making so many headlines these days that it's easy to see some of the really neat stories fall through the cracks. After all, we're so mesmerized by order-delivering drones, Fire TV, and refreshed reports of an Amazon smartphone that we sometimes miss the smaller stories that may pay off in even bigger ways. 

After all, aren't grocery store scanners and drop-off lockers for localized Amazon returns pretty cool? However, one of the coolest things about Amazon doesn't involve bar-raising technology at all. Amazon is starting to turn heads with a plan that pays employees to walk away.

In a letter to shareholders on Thursday night, CEO Jeff Bezos offered up details of a plan that Amazon offered to warehouse workers in January, in which they can collect as much as $5,000 to leave the company. 

Now, a "pay to quit" offer may not seem all that unusual. Companies often offer their more tenured employees incentives to quit voluntarily, knowing that they can be replaced with younger and cheaper hires. Some companies facing the grim prospects of having to lay people off dangle carrots so some folks step up before the ax drops.

However, Amazon's new strategy is unique in that it's still hiring and that even relatively new employees can take the money and run. Fresh hires were offered $2,000 to quit, increasing by $1,000 for every year of service until it maxes out at $5,000. The offer -- carrying a "Please Don't Take This Offer" header -- will be repeated every year.

"The goal is to encourage folks to take a moment and think about what they really want," Bezos writes. "In the long run, an employee staying somewhere they don't want to be isn't healthy for the employee or the company."

Encouraging someone to leave may not seem like a sound financial decision, especially since it takes time and money to train a replacement. However, at a time when some retailers are being taken to task for what they're paying, here's Amazon flipping the script by telling them that they can profit from leaving if it's not the right job. It's deflection in a perfectly executed form. 

An Amazon spokesperson tells CNNMoney that less than 10% of those offered the plan in January took the bait. That may seem surprisingly low given the nature of the work at Amazon's distribution centers, but it's a testament to Amazon's ultimate appeal as a place to work.

It's also brilliant to publicize the practice, which Amazon borrowed from its forward-thinking Zappos online shoe-selling subsidiary. After all, there won't be a shortage of folks lining up to work at an Amazon warehouse, possibly with the intention of leaving next January to score a cool $2,000 after the taxing holiday rush. However, it wouldn't be a surprise if many of those opportunists enjoy the job and stick around. Amazon will get to retain the people that truly want to stay there, enhancing the overall satisfaction and quality of its front line. 

Well played, Bezos.

2 stocks changing the retail world
To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.

Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information