Without torching the organisation or losing your best employees
The gut reaction that a manager has when an employee announces their resignation is telling. Sometimes it is genuine dismay: the person leaving is a star. Sometimes disappointment is mixed with irritation at having to recruit and train a replacement. And sometimes it is relief: the HR equivalent of a pebble being removed from your shoe.
For Elon Musk and his acolytes at the Department of Government Efficiency (DOGE), employees of the federal government in America are pebbles all the way down. On January 28th the Office of Personnel Management (OPM) sent an email to roughly 2m workers offering them “deferred resignation”, the chance to resign and get paid until the end of September. The legality of this offer is uncertain (on February 12th a judge allowed it to proceed). So is the end-goal: bosses often use voluntary redundancy as a consensual way to cut headcount, but the assumption is usually that they want the organisation itself to survive. Still, the episode raises an interesting question: is there a good way to get workers to resign?
The gut reaction that a manager has when an employee announces their resignation is telling. Sometimes it is genuine dismay: the person leaving is a star. Sometimes disappointment is mixed with irritation at having to recruit and train a replacement. And sometimes it is relief: the HR equivalent of a pebble being removed from your shoe.
For Elon Musk and his acolytes at the Department of Government Efficiency (DOGE), employees of the federal government in America are pebbles all the way down. On January 28th the Office of Personnel Management (OPM) sent an email to roughly 2m workers offering them “deferred resignation”, the chance to resign and get paid until the end of September. The legality of this offer is uncertain (on February 12th a judge allowed it to proceed). So is the end-goal: bosses often use voluntary redundancy as a consensual way to cut headcount, but the assumption is usually that they want the organisation itself to survive. Still, the episode raises an interesting question: is there a good way to get workers to resign?
The openness of the OPM’s deferred-resignation offer is in its favour. Bosses have long adopted underhand tactics to encourage individuals to quit rather than have to sack them. Some types of “quiet firing” reduce stimulation and status: managers give their targets menial work to do or stick them in smaller and smaller offices until they end up feeling like a corporate version of Alice. Other approaches set people up for failure: deadlines that cannot be met, weekly meetings at 3am to suit one colleague in Australia. Nudging people to resign by making life intolerable will not win you a manager-of-the-year award. Nor is it an efficient way to thin the ranks.
Giving employees an explicit incentive to leave their jobs can be an effective way to separate the committed from the time-servers. Zappos and Amazon, two online retailers, have experimented with pay-to-quit programmes designed to winkle out new hires who are not motivated to stay. When Mr. Musk took over Twitter in 2022, he sent an email with the same subject-line as the OPM’s missive, asking people to click on a link if they were ready to embrace his “hardcore” culture. Those that did not click were offered severance pay, though lawsuits continue from those who say they did not receive the money.
A pay-to-quit scheme makes it more costly for workers to feign enthusiasm for a job. But, as a paper by Robert Dur and Heiner Schmittdiel of Erasmus University Rotterdam points out, it can have unintended consequences if it is a standing offer: people may end up joining a firm in order to resign and get an exit bonus.
There may be a subtler and cheaper way to prompt resignations among people who are not a good fit. In a recent study by Nava Ashraf and Oriana Bandiera of the London School of Economics and Virginia Minni and Luigi Zingales of the University of Chicago, some employees of a consumer-goods firm were asked to reflect on what mattered to them and whether their jobs fulfilled their individual sense of purpose. In the months following these workshops exits from the company increased substantially among participants, compared with employees who did not take part, and did so particularly among lower performers. Productivity rose.
The success of a resignation offer depends partly on what kind of future awaits people who stay. The OPM email warns government employees that there is more downsizing and restructuring to come. The people most likely to take the money in these circumstances are often strong performers, who have the best chance of landing a new job.
There is some indirect evidence for this effect in a recent paper by Yuye Ding of the University of Pittsburgh and her co-authors, which looks at the effect of return-to-office (RTO) mandates on employee churn. Plenty of people suspect that bosses require people to come back into the office partly in order to prompt resignations, and the evidence from the LinkedIn profiles of workers at financial and technology firms in the S&P 500 is that RTO mandates do cause turnover to spike. The authors also find that churn is greatest among women and among more experienced and skilled workers, and that firms subsequently have more trouble filling vacancies.
Such considerations may not matter much to the DOGE folk, whose primary aim seems to be evisceration. But if you want to encourage resignations and end up with more wheat than chaff, it helps to have a compelling vision of the future.
