An offer that's hard too refuse?

[Rose65]

What can it mean when a company offers their employees about double that which would be a redundancy settlement as a voluntary 'Severance payment?

Someone we know is in that situation. He's in his fifties, still too far from retiring feasibly on his pension. He is in a dilemma as to whether to take this current sudden generous amount and find another job.

His worry is that if he doesn't, he could face redundancy later anyway but without that cushion of about a year's pay. The company wants everyone to move onto new less good contracts, especially those like our friend who is on a good contract. He's worried about what his employers are planning but can only guess.

 

[hollydolly]

I was in the self same position many years ago... I took the severance package , and found myself another job. Granted I was younger than your friend , in my 30's.. but I was right to take it because 18 months later they department ( company) moved to the North of England, and I would have had to leave due to it being too far to travel... and those who didn't take the package still had to find another job but with no financial cushion.. and some of them were just 5 years from retirement at the time..

 

[stretch5881]

It would depend on how difficult finding another job would be in your friend's area. If he decides to stay, but may possibly lose some benefits????
The same thing happened at my place of employment a couple of times. If the affected employees turned it down, they lost a fair amount of benefits. They were too young to retire but health insurance at a very reasonable rate was included in their package. They had all accepted and all found other employment. In the end, they were all happy.

 

[Rose65]

I was in the self same position many years ago... I took the severance package , and found myself another job. Granted I was younger than your friend , in my 30's.. but I was right to take it because 18 months later they department ( company) moved to the North of England, and I would have had to leave due to it being too far to travel... and those who didn't take the package still had to find another job but with no financial cushion.. and some of them were just 5 years from retirement at the time..

Very helpful, thanks.

 

[Rose65]

Our friend is inclined to take it because something must be imminent? They wouldn't be offering such a package for no reason.

It's hard and scary to leave a job after many years. All change is hard.However, the money certainly provides a cushion.
Jobs are around, unemployment is not a problem just now.

 

[hollydolly]

Our friend is inclined to take it because something must be imminent? They wouldn't be offering such a package for no reason.

It's hard and scary to leave a job after many years. All change is hard.However, the money certainly provides a cushion.
Jobs are around, unemployment is not a problem just now.

Exactly right.... and it also means if he has to take a little bit longer in finding another job, he's cushioned...

 

[C50]

Our friend is inclined to take it because something must be imminent? They wouldn't be offering such a package for no reason.

It's hard and scary to leave a job after many years. All change is hard.However, the money certainly provides a cushion.
Jobs are around, unemployment is not a problem just now.

It doesn't necessarily mean the company is in financial hardship but may be trying to restructure for future growth, unfortunately it doesn't appear your friend is part of future plans. And yes, once a severence package is offered its time to look at a feasible exit

If I were in his position I would negotiate the exit package, very seldom are things written in stone.

 

[Rose65]

If he doesn't take it, there will be uncertainty hanging over him and his family I think.
I find in decision-making that two things must be considered - what's the worst that could happen if you refuse such an offer? What's the worst if you accept it?

 

[jujube]

It's always hard to decide whether to take them up on the settlement or hold out for awhile to see if the settlement amount increases. That happened to a couple I know who worked for the same company. The husband took the first-offered settlement (one year's salary) and retired. His wife held on for another six months and the settlement offered was 18 month's salary. She took it and skedaddled.

Some people held out for longer and the settlement went back to one year.

It's a crap shoot, for sure.....

 

[Rose65]

It's always hard to decide whether to take them up on the settlement or hold out for awhile to see if the settlement amount increases. That happened to a couple I know who worked for the same company. The husband took the first-offered settlement (one year's salary) and retired. His wife held on for another six months and the settlement offered was 18 month's salary. She took it and skedaddled.

Some people held out for longer and the settlement went back to one year.

It's a crap shoot, for sure.....

It is a calculated risk. Everyone in his company is being offered sums in keeping with their length of service, all are much much bigger sums than redundancy would be. So he can't understand why? He assumes they are restructuring.

 

[Rose65]

I am seeing a lot of restructuring going on in recent times. Many large companies, such as supermarkets are firing and rehiring on different contracts. We know several people who accepted severance packages and retired in their fifties. Perhaps overall, there is no job for life as back in time when I was young. I walked into a job after leaving school and was there years until I wanted a change.

Am I right in thinking the jobs market now is very different? It seems being able to adapt and go do something else is vital to survival.

I am glad to be retired!

 

[Rakaia]

M y $AUD 0.02, take the money and walk slowly away.

 

[OneEyedDiva]

I always wondered when hearing about severances, how much is actually offered. I got a letter from one of my cousins who worked for a major company for about 30 years. He was offered a severance package (didn't say how much) and since it was about time for him to retire anyway, he took it. He and his wife are successful, probably prepared well for retirement, so should be fine.

There have been some good insights posted here Rose. Since he's likely to be booted anyway or stuck with a lesser benefit package, maybe it would be best for him to take the offer. There are companies that like to hire people in their 50s and up. He could do research to see if any of them are feasible options.