Katherine Brennan Murphy
In these days of dot.com failures and high energy costs, some corporations realize that they need to do some belt tightening. After they’ve cut out the training budget and stopped the Friday beer parties, their gaze falls on the really large expenditures, for example, employees.
Those organizations that care about their employees and want to retain their reputations when the growth curve picks up look for win/win solutions. The three most frequently used are early retirement incentive packages, voluntary layoff (with bonus), and selling off chunks of the company to outside vendors.
The first two choices offer a number of advantages to long-term employees. If you were considering retirement, a sabbatical, or a career makeover in the next five years, this could very well be your ticket out.
If your company offers an incented retirement plan, you may find an opportunity to increase your pension benefits significantly.
The voluntary layoff can also be a win if you’re looking for faster career growth. Let’s say you’ve been with a corporation for 15 years, you are a high performer, and in the normal course of events are ready for that big promotion. Unfortunately, the company stops growing and the internal competition heats up. The company offers a voluntary layoff package (generally with the hope that people close to retirement will leave along with some people whose performance problems are taking up a lot of management time). With a good track record and some cash to tide you over, you will have a good chance of landing that promotion at another firm, because companies like to bring “new blood” into senior positions.
Companies use the third scenario—sell-off of selected departments—when they are slimming down to their “core competencies.” Usually, they either form a subsidiary or sell off the resources (capital assets and employees) to a company that specializes in these areas, for example, human resources, administrative support, and technical documentation.
The new company usually “interviews” all the existing employees in the category and makes job offers to most of them. If the new company fails to make an offer, the employee is laid off from the old company and receives severance and other benefits.
However, if an offer is made, the employee must either take it (which often includes a slightly lower salary and much fewer benefits… especially health care and pension) or “quit.” Employees who voluntarily terminate are often barred from collecting unemployment, which can put them in a real cash bind. The only employees who usually “win” in this scenario are those who are in a position to retire or who feel that working in a company where their “profession” is the core reason for its existence will increase their marketability and long-term prospects.
Economic or industry downturns often provide unexpected opportunities for career growth, change, and expansion. Be on the lookout for how you can capitalize on the changes going on in your company. You can ask to take on new tasks or be a shining example of grace under fire; believe me these actions stand out once the smoke clears.
Perhaps the best reminder is to always be prepared. Dust off that resume and keep it current. Network with peers from other companies and consider doing some information interviews to gauge how your strengths measure up on the outside. Pay down your consumer debt so that when opportunity knocks, you have the resources to let it in the house. Reflect upon your life and make sure that your work is allowing you to meet your personal goals and identify changes you would like to make if only… you had the money, time, etc. So that if you get that offer, you’ll know what to do with it.