On Friday it felt like every news outlet was writing about Amazon.com’s Pay To Quit Program announced in the annual report. Besides this immediate earned media attention, there is real value behind the program when we consider the social media empowered employee. Some simple calculations can show us what a happy or unhappy employee can earn or cost a company on social media.
Embed from Getty ImagesJeff Bezos explains that Pay to Quit is simple. Once a year, Amazon will pay associates to quit if they are unhappy. The first year it’s $2,000 and it goes up $1,000 a year until $5,000. But the retail giant emphasizes “Please Don’t Take This Offer.” They hope associates will stay. Bezos explains, “In the long-run an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.” Bezos is famous for focusing on long-run returns over short term gain such as break even pricing on the Kindle, but when you calculate the value of employee social media use I believe there are some more immediate benefits.
Happy Employees + Social Media = Real Value
Amazon isn’t talking about front office employees here. As Techcrunch put it, “Developers wanting seed money as they run off to build their own startups are out of luck.” This is their fulfillment center employees. When most people talk about employee social media programs they might not have this in mind, but look at the latest social media use statistics from Pew Research. Some 73% of online adults now use a social networking site and 42% use multiple sites. Plus engagement is up with 63% of Facebook users visiting the site once a day and 40% visiting multiple times. The latest data also shows social media use cuts across a diverse range of demographics including age, education, and income. Front office or not, your employees are on social media and a full 40% of cell phone owners are accessing social networks on their phones.
Social Media Examiner predicted Employee Advocacy to be the #2 social media trend to watch in 2014. Each employee has influence through personal social media accounts on Twitter, LinkedIn, and Facebook that can be tapped to share the company’s messages and broaden reach. SmarpShare is a company focused on developing employee advocacy programs and they have provided a simple calculation of the value of social employees.
Look at how much social media platforms charge for clicks. Then look at promoted content that appears in the same area as messages coming from people, and use that as a measure of value. This isn’t actual business value, but it helps estimate potential. For example, LinkedIn charges $3 per click on a sponsored post. Using that, SmarpShare calculates the earned media value (EMV) of employee advocacy. SmarpShare has been measuring this value for over a year and found that one employee share generates an average of 6 clicks. This number varies depending on content, culture, and advocacy tools, but with Amazon surpassing Microsoft and Google to 110,000 employees we can estimate:
110,000 (Amazon employees) x 5 (shares per employee) x 6 (clicks per share) x3 ($ value per click) = $9.9 million EMV (even 50% participation = $5 million EMV)
Pay to Quit isn’t really new. It was invented by Zappos, now an Amazon subsidiary. We all know the Zappos social media story. As early as 2010 Zappos was using Twitter to build brand equity. The company has nearly 500 employees Tweeting. CEO Tony Hsieh was an early adopter of Twitter and encouraged employees to engage online openly during work as detailed in his 2010 book Delivering Happiness. According to SocialMention, today Zappos is referenced every 2 minutes, and positive sentiment is 9:1. Zappos.com also has a 65% passion rating, which means people are repeatedly talking about the brand over and over.
Will social employee advocacy work for everyone? Not if you don’t have happy employees and unfortunately most do not. A recent Forbes article reports 70% of U.S. workers don’t like their job – they are disengaged with work. Forbes contributor Sylvia Vorhauser-Smith says, “Disengaged employees can drag down others and impact everything from customer service to sales, quality, productivity, retention and other critical business areas.” What if those unhappy “disengaged” employees are actively engaged in social media? Suddenly, Jeff Bezos Pay To Quit program looks like a bargain.
I remember when a previous boss told us we better learn social media or leave. Yet at the end of the same meeting he said if he caught us on Facebook at work we would be fired. SmarpShare says there needs to be mutual trust between the organization and employee. The days of controlling employee actions in social media are over. Obviously, Bezos doesn’t want fulfillment employees posting Facebook updates all day long instead of packing orders, but with the right guidelines and program in place the ROI on Pay To Quit can be huge.
Adding To The Noise 
April 14, 2014 at 2:03 pm
That’s such an interesting spin on reinforcement — rewarding unsatisfied employees to quit. However, I wonder how the happy employees feel about that? Do they get a bonus every year if they are happy? If I were a happy employee and performing well in my job, then why shouldn’t I get double the unhappy employee’s bonus? I’d love to know how happy employees feel about it!
April 14, 2014 at 2:22 pm
Great question Mike! I did find that employees who do stay can benefit from even more valuable programs such as Up to 95 % in tuition fees so they can take college courses for in-demand jobs – even if that means that in the long term they will leave the company. A Deloitte study says the biggest reasons people quit have less to do with pay. Instead, what most often makes them move on is opportunity to develop and use more of their skills and abilities elsewhere, cited by 42%. More than a quarter (27%) also cited a lack of career progress in their old jobs, and 21% mentioned “lack of challenge.” Other things such as culture and co-workers can make a difference. I know I have made job changes in my career where I took less money to get out of negative work environments. Tony Hsieh, CEO of Zappos, also says that only 3% of the new recruits at his company ever accepted the offer.