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Adding the word voluntary in front of separation, retirement, and severance packages seem to be the new, empathetic way for companies to handle layoffs whether it’s the tech industry or higher education. These programs, also broadly known as voluntary incentive separation programs, have been around for decades. They first gained traction in the ’80s and ’90s and saw a resurgence of popularity during the COVID-19 pandemic. Voluntary layoffs are programs that offer employees incentives to leave. These incentives may include extra pay for a few months, healthcare coverage, and other employment services such as career counseling. Why is this beneficial for employers? Typically, voluntary programs are offered in order to avoid involuntary layoffs down the line.They allow for employees to retire early or make a career change. Christopher Nickson, vice president and senior consultant for HR firm Segal, explains that voluntary layoffs are often beneficial for companies looking to downsize their highest paid employees. Oftentimes you are taking somebody who has worked for the organization for many years, and as time has gone on, their wages have gone up steadily as a factor of increased experience, Nickson said. He points out theyll typically be replaced by someone with less experience. The result is they come in, typically at a [lower] compensation rate that’s beneficial to the company, Nickson said. Essentially, companies view the voluntary programs as a more empathetic and transparent approach to cost savings than layoffs where employees are given no choice. But not all who are offered these programs agree. In April, Duke University announced a voluntary layoff program in order to cut 10% of the universitys costs, or roughly $350 million. The offer included compensation for one week of regular pay multiplied by years of service, maxing out at 26 weeks. In response members of the Duke community wrote a letter entitled Duke, Dont DOGE to the universitys administration and president, Vincent E. Price, pointing out that cuts could be made elsewhere. The letter calls the voluntary layoffs institutional hoarding. It notes that some of the highest paid members of the institution (those making over $1 million), including Price, could take a 25% pay decrease, and those earning $500,000 to $1 million, could take a 10% decrease voluntarily and save Duke $6.6 million. Duke is one of the first major universities in the country to enact sweeping layoffs across its workforce. This is a historic and devastating move, the letter states. And while workers are losing their jobs, housing, healthcare, and immigration status, Dukes top administrators and athletics personnel continue to pull six-and seven-figure salaries. There are no cuts at the top. Theres no shared sacrifice. Just more for themand less for everyone else. Nickson argues that universities like Duke are in a tight spot since enrollment rates are dropping, and universities are seeing grant and funding cuts. Overall, Nickson believes these programs are a good way to minimize or avoid involuntary layoffs later on. It’s a win for both the institution and for the individual,” he said. What to consider when offered a voluntary layoff It can be difficult to decide whether or not you should take part in a voluntary layoff or buyout. Here are some factors to consider: Your likelihood of being laid off. Ask yourselfhow likely is my position to be impacted later on? And, how strong is the current job market for someone with my experience and skills? If you feel like you’re going to get laid off if you don’t take the severance, you may as well do it, career coach and founder of Life after Layoff Bryan Creely said. The voluntary severance is generally going to be more attractive because they’re trying to incentivize people. If you don’t take the voluntary severance and they move to eliminate your job anyway, it’s likely not going to be as attractive of a package. Where you are in your career and what you want next Taking a voluntary leave could open the doors for a career change, offering an exit from an unwanted job, or a ramp into retirement. Consider how easy will it be for you to pivot. Are you looking to switch industries entirely, which may take longer to find a job or gain additional certification? Or are you mid-level, at your career prime with a niche or specialized background where there’s demand for your skills? Are you close to retirement? Would taking a voluntary layoff allow you to financially and emotionally move on comfortably without having to find a new position? Hypothetically, if you’re close to retirement and you have the option to take part in a voluntary layoff for one year’s payment, this is a great opportunity for you, said Micah Alpern, senior managing director at CEO global advisory firm Teneo. But, if you’re a young person, like a newer, tenured employee, this might be very negative to you if you receive four months severance but have to find a new job. What is being offered and what are your rights? It may be helpful to enlist the help of a financial adviser, career coach, or legal counsel to understand the full scope of your needs and rights. As each program has different incentives and financial offerings, it is important to fully understand your offer before accepting or declining it, as each program varies with their incentives and financial offerings. Typically, taking a voluntary layoff means you still qualify for unemployment in most states. But, you should get a written statement from your employer, stating the reasons for the layoff. For better or for worse, theres a good chance these programs will continue, as general rates of layoffs have remained consistent over the past few years in the U.S. The layoff cycle is getting shorter and shorter. It used to be that there would be a layoff cycle that would happen once a decade, Creely said. Then COVID-19 hit, and now the layoff cycles have now gone from roughly every 8 to 10 years down to two years, or even shorter than that. I think they’re becoming a much more prevalent part of corporate culture unfortnately.
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E-Commerce
Its annoying to feel like your boss is bad at their job. But it doesnt mean you have to quit.
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E-Commerce
Juliet Schor is an economist and sociologist who specializes in the study of work. She is a professor of sociology at Boston College, having previously taught at Harvard for 17 years. Her previous books include the national bestseller The Overworked American. Juliet has received numerous awards for her research and writing and has had her work published in scores of magazines and newspapers, including The New York Times, The Wall Street Journal, Newsweek, and People magazine. She has also made several appearances on popular newscasts. Whats the big idea? For a while, the concept of a four-day workweek seemed aspirationalutopian, even. However, it is now more realistic than ever. Research increasingly shows that switching from five to four days is a win for employees and their entire company. Well-being increases (and stays that way), retention issues are solved, and heightened productivity replaces fatigue and stress. The benefits are so impressive that governments are getting involved in legislating fewer working hours. Times are changing, and modern life and modern business are better off on a four-day work schedule. Below, Juliet shares five key insights from her new book, Four Days a Week: The Life-Changing Solution for Reducing Employee Stress, Improving Well-Being, and Working Smarter. Listen to the audio versionread by Juliet herselfin the Next Big Idea App. 1. The four-day week is life-changing for employees Between dual-earner households, the faster pace and complexity of modern life, and intensifying job demands, weve heard over and over that two days is not enough to manage life admin, see family and friends, and recover from the workweek. Around the world, levels of stress, burnout, and disengagement remain historically high. Thats a big part of why we find that a third day off is transformational. Physical and mental health, sleep, fatigue, and anxiety all improve, according to survey and biometric data. Stress and burnout are reduced. People are happier and more engaged in their work. The obvious reason a four-day week is transformational is the ability to work less. In our statistical modeling, we found that the larger the working time reduction, the bigger the well-being impacts. People who manage to reduce their time by a full eight hours per week experience about twice the improvement in well-being. When we drill down to see what it is about working less that makes people so much better off, two factors emerge. About half the increase in well-being is due to behavioral changes outside of work, such as better sleep, more exercise, and less fatigue. The other half is that people register much higher levels of effectiveness and performance at work. 2. Working less boosts productivity We discovered that people are much more productive on a four-day week. They report being able to find more efficient ways to do things. People report that theyre no longer experiencing the Sunday Scaries, and they show up on Monday mornings feeling refreshed, rather than anxious. They feel more on top of their workloads and score higher on a work smart scale. They do a better job prioritizing whats important, spend less time spinning their wheels, and are more motivated to get through their to-do lists. These individual impacts collectively contribute to the organizations overall success. Companies tell us they are maintaining or increasing overall productivity when they switch to a four-day workweek. Thats counterintuitive if we assume that productivity mainly depends on how long we work. But there are several reasons for better performance. Staff are healthier, more energetic, and more loyal. Organizations become more intentional and invest in the upfront work that saves time in the long run. Customer-service-facing organizations in the tech world tell us they have finally gotten serious about documentation. Other companies report eliminating unnecessary forms or bottlenecks in approval processes. These are all examples of the forcing function of the four day week (4DW). It makes organizations do things they know will save time but have been too busy to accomplish. Organizations become more intentional and invest in the upfront work that saves time in the long run. The other major effect is that the four-day week stops resignations dead in their tracks. In one of our most successful cases, the manager explained that, on her team, turnover went from 30% a year to zero. That 30% turnover figure is common in her industry, and solving it avoided the wasted time of onboarding and training new people, which yielded a better product and higher sales. At a hospital we studied, the opportunity for overworked nurse managers to get a third day off led to many rescinded resignation letters. At a restaurant (another high-turnover industry) people also stopped quitting. A four-day-a-week job is much more valuable to people. About 15% of our sample says that no amount of money could induce them to return to a five-day schedule. Many more would require a significant pay increase to return. Thats why when people get a four-day week, they dont leave. 3. A whole organization transformation For years, companies have tried to address employee stress and burnout with individual solutions. Theyve tried flex time, scheduling accommodations, wellness classes, yoga, and mindfulness. The academic research shows that none of these works. Stress and disengagement have only gone up. Those on shorter schedules often suffer stigma or get paid less, but end up doing as much work as before. In contrast, reducing hours across the entire organization is a real solution. In the trials we studied, companies received two months of training on how to implement the 4DW before they began. How is making it work defined? Well, there is some variation across companies, but generally, its defined as doing five days work in four. Companies were coached on ways to get inefficient meeting cultures under control and to create focus time. They learned about new time-saving software or how to analyze their processes to eliminate wasted steps. They achieved success because it wasnt just on individuals, but everyone was pulling together to change the culture. That results in a true shift in work norms, shifting from the facetime/productivity theater model to one thats focused on results. 4. Almost all the companies who try it stick with it Our team wanted to know if the great results we saw would persist. So, we went back to the companies at one and two years in. We found that improvements in employee well-being were remarkably stable. Almost all the companies stayed on the four-day schedule. Perhaps more surprisingly, almost all the companies stayed on the four-day schedule. Some instituted a few tweaks to their programs, but only about 10% reverted to five days after a year. If we exclude those who never really gave it a try, its closer to 5%. Maintaining or raising productivity, improving product quality, reducing turnvers, and getting happier, more satisfied employees is a recipe for success. 5. The four-day week is coming It has been 85 years since the workweek was last reduced. Since the pandemic, pressure has been building, especially in the U.S., where working hours have been increasing. There is plenty of anecdotal evidence that Fridays are evolving away from a standard workday. Working from home is accelerating this process. But its not just an organic evolution to the four-day week that were seeing. Governments are beginning to encourage or even legislate worktime reduction. The Polish government has just announced a pilot program similar to the ones weve been studying. This follows similar pilots by the governments of Spain, Scotland, Belgium, Portugal, and the Dominican Republic. The government of Tokyo has recently implemented a four-day workweek for all its employees. Spain has just legislated a reduction in the workweek for the entire country to 37.5 hours per week. Recently, two bills to run pilots were filed in New York state, making it the 11th state considering legislation. And a growing number of local governments are shifting to a four-day week for their employees, with some saving money in the process. AI will accelerate the shift to four days. As companies incorporate AI at a rapid clip, society is faced with a stark choice: Are we going to lay off millions of people? Thats a possible outcome with a technology that can replace so much human labor. But its not our only option. We could follow the path we took with the first industrial revolution. We can use that labor-saving technology to reduce working hours and keep employment high. Thats the path we shouldand I think willtake. I started researching worktime reduction many years ago. At the time, it was seen as aspirational, even utopian. But that has flipped, and now the four-day week has become common sense. It is also the smart option if we want to protect our economy, democracy, and society. This article originally appeared in Next Big Idea Club magazine and is reprinted with permission.
Category:
E-Commerce
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