<p>I would love to hear thoughts/opinions on this topic. When a firm offers buyout packages to older employees, what does that really mean in the big picture of the company?</p>
<p>This isn’t about me – I’m only in my 40s, but it happened at my former firm and I had lunch with a group of friends from there today. They seem to have lined up on two schools of thought, one that the firm wants to ultimately have no permanent staff and is starting the process of shedding permanent employees in favor of all temps, the other is that the firm has a bottom line it wants to get to and will then be happy with the staffing it has at that level. Some of the friends are digging in to fight, but others are of the view that the first offer is the best offer and if you don’t take it, it’s inevitable that you will be let go. I’ve never worked at a company that did this and since it is becoming very common in my field, I thought I would see if anyone has any insight or personal experience so I can be prepared if it does come my way.</p>
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What fight? Assuming they’re employed ‘at will’, what do they think they’ll fight? If they get any package at all it’s better than what the company actually needs to do by law. I understand maybe ‘not liking’ what the offer is but I don’t see how they can ‘fight’ it.</p>
<p>GladGradDad, the word fight was my poor choice of words, not a reflection of action that would be considered. A better choice of words would have been “refuse.” Some people are going to take the offer and some are going to refuse. I’m just curious as to what this all really means because, as I said, it’s a new one on me and I’m confident that it will be coming to my firm sooner rather than later.</p>
<p>Many years ago, my mom took a buyout. I’ve seen it in my industry several times. It is generally attractive to employees nearing retirement or who are considering leaving anyway. (I’ve seen people take them and stay home with their kids or change to new careers.) In the cases I’ve seen, the employers want to get rid of the higher salaries of more experienced people. Sometimes they are replaced with young workers or the company allocates the resources from one dept into another. The employees who want it take it and the ones who want to stay can do so and may be laid off or not, just like any other time. The ones I’ve seen are generally not enough money to be attractive to someone who loves their job and plans to be in it for another 10+ years, but it can be enough money to tip the balance for someone who was thinking of retiring in the next 2-3 years.</p>
<p>We have a number of friend’s who took “golden handshake” offers from their employers. ALL were happy with the choice to do so. In a couple of cases, the offers my friends took we’re quite good…including things like health insurance until age 65. Some of their colleagues who said no have not seen as generous an offer since.</p>
<p>Some have taken jobs at other places. Some have retired completely. I don’t know anyone who regrets taking an early retirement offer.</p>
<p>DH has worked for the same company for 31 years. He’s planning to retire next year (at 55). We’ve heard rumors of a buyout package. We would love to be offered one. He is more than ready to leave.</p>
<p>THank you! The firm where I used to work has the oldest group of employees I’ve ever encountered. Everyone offered the package was above 62, but that was a small number because the ages range from 62 to 81 with most people getting the offer above 70. My current firm doesn’t skew that old at all.</p>
<p>Well another thing many people don’t know, non national firms have their insurance rates set by the average age of the employee. It certainly encourages wanting younger employees on the payroll!</p>
<p>My dad worked for a major pharmaceutical for 25+ years and got a buyout package which he took. It included insurance for life, which included my mom, and she still uses it as her secondary.</p>
<p>That’s a REALLY old staff! Many times when companies are trying to downsize they do this voluntarily first before not being given a choice.</p>
<p>My opinion…those at retirement age are lucky they were offered this package. Often when companies think folks are going to retire anyway…they don’t offer a package. </p>
<p>If one is ready to retire anyway, often these incentives just sweeten the deal!</p>
<p>Yes, if the person is close I’d say take it. One thing to look for in the agreement is whether it precludes the person from filing for unemployment. Usually it does, but some people mistakenly think they can file while looking for another job.</p>
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ZM - I guess I interpreted the word as ‘refuse’ in your post but even with ‘refuse’ there’s usually little they can do - if the company wants them gone then they’ll be gone, either with the package or without it.</p>
<p>I think oftentimes ‘the package’ includes some legal language, i.e. it’s a contract, whereby the person accepting it agrees to not sue the company over the termination - especially for age discrimination. If they later decide to sue, which of course they can still do if they want to, they then need to return the money specified in the termination package since they’ve now broken the contract. This package is generally put in place to both protect the company and appease the terminated employee.</p>
<p>As to whether refusing the package will be to their benefit, it’s hard to say and it depends on the company’s intentions. There are some companies that will offer an ‘early retirement package’ and some people will take it and some won’t but the people who don’t simply stay with the company and there are no ramifications - i.e. in a large company the company offers it and perhaps 100 people take the company up on it but 500 people in the same age category don’t - the company’s happy it had the 100 person reduction and the people who accepted it are happy because it’s a heck of a lot better than just giving one’s 2 week notice for when they were going to retire anyway.</p>
<p>But I’ve also seen ‘packages’ offered to people who were going to be terminated regardless in which case the legal contract and incentive aspect applies. But in these cases a company has to be very careful they don’t discriminate based on age, which might be easy to do in this situation, again, hence the offer of the package.</p>
<p>If this is a true early retirement package then there shouldn’t be anything negative happening to the people who refuse the package but if the company’s intent is to really be rid of the people under this cover, then those people will probably ultimately be let go anyway, whether they accept the package or not.</p>
<p>I know someone who accepted a termination package a couple of times - terminated (he volunteered for it), got the package (a pretty decent one), got rehired later, then terminated again (volunteered again), and got the package again. This was unusual but that worked out well for him. </p>
<p>I’m hoping I’ll get offered a package when I’m about ready to retire.</p>
<p>The company my husband works for does this on a somewhat regular basis when they want to thin the ranks. Usually they add on extra years(5 to 10)to the number of years an employee has worked for the company so they end up with a much better pension. Most people take it.:)</p>
<p>I took a buy-out because of my age and years of service but not really by choice. It wasn’t anywhere near reflective of what I would have left with had I continued with the company. I am currently working and will continue to work at least 4-5 more years…at least.</p>
<p>I’ve witnessed a variety of package scenarios … all of the “we’re downsizing” category. Large companies generally have many employees of each type, and thus have more flexibility. I worked for a small organization facing financial difficulty. An early retirement package was offered to everyone over a certain age. The offer was decent, and was accompanied with the message “take the offer or be terminated.” I can’t think of any individual who took a package who regretted the decision. YMMV.</p>