Chattanooga's biggest freight broker is offering $2,000 to anyone who wants to quit the company.
Steam Logistics isn't trying to cut its staff after hiring 450 workers last year and moving into a new corporate headquarters earlier this year. Company founder and CEO Jason Provonsha said the offer is simply intended to allow those not wanting to stay with the company an easy way out and help ensure those staying on with Steam Logistics are passionate about their work.
"This incentive is something we have done periodically for many years, and it's not tied to the current market conditions," Provonsha said in an emailed statement outlining the offer to employees. "If team members are on the fence about their long-term commitment to their role, we can offer this as a way to help with an easier transition and have that seat available for someone else."
Provonsha said the idea is patterned after a program online retailer Zappos began a decade ago under what was known as "The Offer," which provided new employees who decided they were unhappy a $2,000 bonus to quit following a four-week training period.
The practice was designed to weed out those who weren't enthused about their work or employer and was seen as a way to bolster overall workforce happiness.
"We want to make sure that employees aren't here just for paychecks and truly believe this is the right place for them," Tony Hsieh, Zappos CEO at the time, told Business Insider in 2016.
Steam Logistics typically hasn't had many workers that take advantage of the offer to quit the company, although a few dozen of the company's 850-employee staff did this year, Provonsha said.
"We really see it as a win-win, and it helps us to maintain a positive culture of people who are committed to the business," he said. "We've rarely had anyone take us up on it, but we did have some opt-in for it during this recent offer."
With international shipments down from the peak levels reached during the pandemic, international freight brokerage business has slowed.
"Overall, we have seen some headcount reductions this year as the market has cooled in logistics," Provonsha said. "Coming out of the historic disruption we saw over the past couple of years, shippers are now sitting on a lot of inventory, which means that they are making fewer orders and shipping fewer goods. Because of that, we have seen some people decide to leave for other opportunities."
Steam Logistics has also had some involuntary staff reductions in response to the market downturn, officials said.
"We have moved to a slightly more conservative footing for hiring sales positions, while continuing to hire as usual for other key roles, particularly within our technology team," Provonsha said. "With the amount of hiring we have been engaged in over the past 18 months, we are now letting those investments settle a bit, to see how the market conditions shake out."
Provonsha said he remains "very confident in the long-term future" but is "proceeding a bit more cautiously in the near term" in response to what he says are typical cycles in the freight industry.
The "cash for quits" offer not only benefits those deciding to leave the company. A voluntary resignation can also help the employer avoid the costs of layoffs in unemployment insurance premiums and other benefit expenses for displaced workers. Amazon recently reported expenses of $640 million for the cost of laying off 18,000 of its employees since November.
Steam Logistics recently moved into its new 60,000-square-foot, four-story headquarters building at Broad and Fourth streets, where most of the company's 635 employees in Chattanooga now work.
"We expect net headcount growth in 2023 and will continue to grow into one of Chattanooga's largest employers," Provonsha said.
Contact Dave Flessner at firstname.lastname@example.org or 423-757-6340.