Recruitment & Retention

Pet food company Stella & Chewy’s says it will give employees a $15,000 bonus—if retention improves

If the voluntary turnover rate drops from 62% to below 23%, employees at the company’s Wisconsin manufacturing site could receive a hefty payout.
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4 min read

Retention bonuses aren’t anything new. But one that relies on what your coworkers are doing? That’s not something you see every day—unless you work at Stella & Chewy’s.

The pet food company’s Wisconsin manufacturing site, which employs over 600 of its nearly 800 global employees, has struggled with retention in recent years, said Bruce Larson, chief people officer at Stella & Chewy’s, with its voluntary turnover rate hitting 62% in 2022. While this was the average turnover rate for nondurable goods manufacturing in the US in 2022, up from 36% in 2018, according to the Bureau of Labor Statistics, Larson told HR Brew it was “not the kind of number that we’re satisfied with.”

He hopes his company’s new retention plan will help dramatically decrease their voluntary turnover rate.

What’s the plan? Earlier this year, Stella & Chewy’s announced the Stay Plan to boost retention. It incentivizes manufacturing workers, dubbed “production pack members,” to stay with the company by offering $15,000 bonuses if the site’s overall voluntary turnover rate drops below 23% in three years. All manufacturing employees at the Wisconsin site, at the end of three years, are eligible for the bonus.

“We really started to think about what we could do different, in order to try to improve the culture. It wasn’t what gimmick could we come up with to get people to come in the door,” Larson said. “It was what can we do to make the [company] someplace that people want to stay once they come here, so it’s a program that’s focused on retention versus attraction.”

Employees who started on or before April 1, 2023 have until April 1, 2026 to achieve the goal, while those who start on or before March 31, 2024 have until April 1, 2027. Bonuses will only be paid upon completion of the goal.

The first two years of the program will be dedicated to starting weekly conversations between leaders and employees about what is and isn’t improving retention, how leaders can help new hires, and what success looks like in different roles.

“We will pay people a nice incentive after a period of time, but only if they have helped us to reduce our collective turnover rates, which can’t be done just by wishing,” Larson said. “You have to talk to your employees, help them understand what impacts employee turnover, what positively impacts retention, [and] what’s within their locus of control.”

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A caution. While Stella & Chewy’s bonus may seem like a powerful incentive, Havilah Vangroll, owner and CEO of HAVe Strategy Consulting, said it could lead to “negative peer pressure to keep somebody in a job that may not be serving them or serving the company.”

Larson said, in a follow-up email via PR rep Samantha Strausser, that while he hasn’t seen peer pressure so far, he said it could “make sense in year three when the results matter most.”

Businesses can legally structure a bonus however they want, said employment lawyer Devora Lindeman at Greenwald Doherty. She told HR Brew that companies should put every part of the bonus plan in writing so that specifics are outlined for employees.

Larson said, via email, that Stella & Chewy’s created a written document for the Stay Plan, with assistance from the company’s employment attorney, and the document is available to employees by request.

Consider this. Vangroll recommended conducting a “hardcore assessment of what’s going on” in the organization. This might involve an HR team auditing its company’s culture, interviewing employees on a regular basis, and conducting exit interviews to gain insight into low retention.

Stella & Chewy’s has used exit interviews over the years, and employees have cited “a desire for more of a connection with their leaders, dissatisfaction with onboarding, and dislike of our attendance program,” said Larson, via email. He also said the company is starting a forum where employees can share feedback with managers and HR.

For those companies considering an incentive program to boost retention, Vangroll said she would advise paying out a portion of the bonus each year, rather than in a lump sum at the end of the program. But even this strategy may not necessarily get to the root of the issue.

“It behooves the company to really get down granularly into how we attract and keep our staff without necessarily having to pay them these [incentives] that can create a conflict within our own culture,” she said.

Quick-to-read HR news & insights

From recruiting and retention to company culture and the latest in HR tech, HR Brew delivers up-to-date industry news and tips to help HR pros stay nimble in today’s fast-changing business environment.