This article – Keep your job for five years, get $50,000 – was published on CNN Money this morning and has been flying around Twitter all day.
The gist is this: one small business owner is offering his full-time employees $50,000 bonus for every five years that they stay with the company. The article brings up the key points:
Reward for retention – Nowadays, there is nothing that makes people loyal to a company, but Dan Schneider, the founder and CEO of SIB Development and Consulting (the company dishing out the cash) believes that a $50K retention can change that.
The average amount of time that people stay at a job is 2-3 years, especially at startups; staying at a company for 5 years is rare.
Additional bonus at 25 years – If employees stay at the company for 25 years, they will receive $250,000 cash (the article doesn’t specify if that’s the total of $50K for every 5 years or $50K for the first 5 years and $250K at 25 years).
Cut costs to train new employees – For the SIB, the bonus is really about retaining high-quality employees and not having to spend the money to train new ones over and over again.
Happy Employees
The most interesting part about this article isn’t the bonus, but the fact that every single one of the employees pictured is smiling, genuinely. Sure, it could have taken over a dozen shots to get this one photo, but if you look closely at the photo, they really look happy.
Maybe Schneider has a point. Maybe the promise of $50,000 after 5 years of service as a “thank you” is how much it costs to keep happy employees who are “not looking for work.” Maybe he’s on to something.
Why Money Talks
There have been many, many articles around the web about the key to having a successful business (and especially a startup) is to have the right people on your team and how you really need to work hard to keep them.
Mark Suster wrote a stellar article in TechCrunch earlier this year about it and while he broke down the kinds of people you specifically want involved with your startup, the title of his article said it the best: A Few Key People Really Can Make a Huge Difference.
But it’s not about having the right people on your team; it’s about keeping them. Tony Hsieh, the CEO of Zappos.com, talks a lot about this (and unfortunately I can’t find the exact article that talks about this, so I’ll link to this one: Got talent? Competing to hire the best and motivate the rest).
Say “Thank you”
I’m going on a limb here, but maybe the reason why this bonus structure will and can work for Schneider is because he does have the right people at his company and he wants to keep them.
You have to motivate and retain your best employees. You need to say “thank you” and let them know that you are going to take care of them for them to stick around.
A company who wants to appreciate and take care of their companies? That’s as rare these days as an employee who wants to stick around for five years.
Would you stay at a job for 5 years if you got a $50K bonus?
11 Responses
Very interesting initiative. I personally have never been motivated by money and would only work for an organization I am passionate about. I can see that money is a big motivator for many people, though, and it seems like a good bonus/way to attract and keep talent.
I’m there with you, while earning a living wage that is in-line with past experience and expectations to fulfill the position, bonuses don’t motivate me personally. However, I also have not worked at a company that has been in a position to offer their employees bonuses to that level.
I think the key point is that employeers need to find some way to attract and retain their employees if they want to keep them, and this is one way to do it.
I just saw your blog post today and see that it’s on a very similar subject — excited to dive in there 🙂
Very interesting initiative. I personally have never been motivated by money and would only work for an organization I am passionate about. I can see that money is a big motivator for many people, though, and it seems like a good bonus/way to attract and keep talent.
I’m there with you, while earning a living wage that is in-line with past experience and expectations to fulfill the position, bonuses don’t motivate me personally. However, I also have not worked at a company that has been in a position to offer their employees bonuses to that level.
I think the key point is that employeers need to find some way to attract and retain their employees if they want to keep them, and this is one way to do it.
I just saw your blog post today and see that it’s on a very similar subject — excited to dive in there 🙂
That’s interesting.
I like to think I’d work only if I like it, but that’s not true.
In addition to the blog stuff I’m doing, I’m working on other start ups in real life with an old high school buddy – I might end up biting the bullet just for the retention pay.
But who knows, maybe after working for 3 years I’d dream about jumping off a bridge so much that I’d pull out.
At a lot of jobs I’ve had previously pay meant nothing though.. either my life didn’t change much or It didn’t help me enjoy the job anymore, so it was useless. A 50 grand bonus would probably go to time and money wasting like most lottery winners end up doing – and are broke within another 5 years.
What about you?
For this kind of thing to work, you’d definitely have to be satisfied with what you’re doing to stick it out for 5 years. But for many Gen Y’ers, we also need to feel passionate and a sense of fulfillment in our day jobs.
If the job that’s offering you $50K to stay for 5 years does, then yeah, it’ll totally work.
For me personally, every single job that I’ve had have been during stages of growth. I have not found a position or a company yet that I’d want to be at for 5 years, though that could change, of course 🙂
That’s interesting.
I like to think I’d work only if I like it, but that’s not true.
In addition to the blog stuff I’m doing, I’m working on other start ups in real life with an old high school buddy – I might end up biting the bullet just for the retention pay.
But who knows, maybe after working for 3 years I’d dream about jumping off a bridge so much that I’d pull out.
At a lot of jobs I’ve had previously pay meant nothing though.. either my life didn’t change much or It didn’t help me enjoy the job anymore, so it was useless. A 50 grand bonus would probably go to time and money wasting like most lottery winners end up doing – and are broke within another 5 years.
What about you?
For this kind of thing to work, you’d definitely have to be satisfied with what you’re doing to stick it out for 5 years. But for many Gen Y’ers, we also need to feel passionate and a sense of fulfillment in our day jobs.
If the job that’s offering you $50K to stay for 5 years does, then yeah, it’ll totally work.
For me personally, every single job that I’ve had have been during stages of growth. I have not found a position or a company yet that I’d want to be at for 5 years, though that could change, of course 🙂
Laura, I’d be curious to see the long term effects of this. For instance, how many people bail out after five years. It would be an interesting case study to follow, especially to see if the company is solvent enough to offer the $250,000 after 25 years.
It’s an interesting strategy. Appreciation goes a long way to motivating employees and this financial incentive is pretty darn generous.
Laura, I’d be curious to see the long term effects of this. For instance, how many people bail out after five years. It would be an interesting case study to follow, especially to see if the company is solvent enough to offer the $250,000 after 25 years.
It’s an interesting strategy. Appreciation goes a long way to motivating employees and this financial incentive is pretty darn generous.
Exactly, that’s where my curiosity stands as well. From the sounds of the article, the company is in pretty good standing, though who knows what the situation will be like in 5 years.