Your Money Month: Assessing an employer's buyout offer
Shaw Communications employees had a big decision last week, and when the deadline hit, 25 per cent of eligible workers decided to take up the company on its voluntary buyout offer.
Have you ever wondered how you might have responded if given the same opportunity?
A good place to start is to ask yourself whether you work in a sector that is considered to be a “sunset” or “sunrise” industry. Your answer may dictate your decision to accept or reject a package.
Sure, there are basic considerations to take into account, such as how attractive the voluntary buyout is compared to an involuntary termination? You need to understand what you are entitled to. For example, if your organization is federally regulated, you would be covered by the Canada Labour Code. The point is there are many provisions to consider, and in many cases, the companies severance policy is outlined in the employment contract.
You would be wise to seek legal counsel if circumstances warrant it, but that can prove costly and you can be sure your organization already has a legal stamp of approval on the proposal. But it could still be money well-spent to see if it is a fair package being offered. If the company has a published severance policy, check to see if the package is more or less generous.
If you have a company pension plan, do you continue to vest or receive contributions during the severance period?
Also be sure to read the fine print to see if there are conditions attached to package. For example, does the package get reduced if you take alternative full or part-time employment? Are you restricted from working for any companies, such as competitors or suppliers to your existing company. Will you be provided with transition support such as outplacement?
However, the decision to accept a voluntary buyout is often driven by your personal situation. But don’t underestimate the emotional impact, regardless of what you choose.
It might be prudent to ask yourself a few questions that may ultimately sway your decision to stay or leave:
1. Do you love your job?
2. Is there growth potential if you decide to stay? Not only for the company but you personally?
3. Is the package attractive enough to tip the scale and pull the plug?
4. Do you have emergency funds set aside to bridge financing should you need it?
5. How employable do you think you are?
6. Will you need additional skills training?
Mapping out a “plan B” could take some time and support from professionals who do this sort of thing for a living. We are all living longer, and so you want to be sure you are doing what you love to do.
This could prove to be your “golden” opportunity – but be sure you dig into the details.