Expert tip: When to take a voluntary redundancy

On his ninth day of hotel quarantine, senior mechanical engineer Nick Hayllor has a lot of time to think about whether taking a voluntary redundancy was the right call.

Not long ago, the Queenslander was working as a principal design engineer in the UK and living in a home he’d recently bought. In the last month, he packed up his life, farewelled the friends he’d made over the last nine years and returned to Australia.

All because voluntary redundancies were being offered.

“I’d just spent nine weeks at home in lockdown and to be honest, I think I grew as a person during that time,” he tells Get Hired Australia.

“During my isolation, my old man was diagnosed with cancer. He’s doing fine, but stuff like that makes you think, ‘I’m in the middle of a country with no immediate family nearby. If something goes wrong, it’s hard to get home’. I have nieces and nephews too and I started thinking about wanting to be around to see them grow up."

His voluntary redundancy was accepted and Hayllor is now preparing to live and work in Brisbane — within driving distance of his family, near his best mate and with opportunities in his industry.

In Victoria, academic Kevin Brianton has also recently taken a voluntary redundancy. Not far off retirement, he says it was a sensible move. He’s got one piece of advice for those considering a voluntary redundancy: "People often consider the money attached to a voluntary redundancy but I would suggest people also think very carefully about the social aspect,” he tells Get Hired Australia.

“The thing I miss most about work is the contact with other people. It is very hard to go from a role where you are speaking to people every day, maybe talking on the phone or Zoom, and then it goes. And it really does go.”

While the coronavirus pandemic is leading businesses in impacted sectors like university education and travel to offer voluntary redundancies, career coaches know it is nothing new.

If you have been offered one, or know someone who has, here are the things career coaches suggest you consider before making the move.

Taking a voluntary redundancy can be empowering

Mel Aurino: "In my honest opinion, if you are offered a voluntary redundancy I would accept, regardless of the current economic situation. If a company is offering redundancies, chances are high that they need to cut costs and you may end up being let go without any financial incentive. Most people are afraid to leave the security of their current job due to a lack of belief and confidence in themselves. This is one of those times where I would advise to not let fear get in the way."

Sarah Felice: "In my experience, those who choose to take a redundancy are often more confident coming into the job market because of the perceived higher control of the situation. They are usually leaving an organisation in turmoil which is better than staying and waiting and wondering if you will be next, which is a very stressful situation to be in."

Think about your career journey

Sarah Burgess:

"How happy are you in your role now? Are you coasting? Has it been easy to stay rather than looking around? Do you want to push yourself, or are you at a stage in your career when easy and convenient has suited you?"

Richard Taylor: "Give careful consideration to what is on offer in your industry (or outside of your industry) that you can do based on your skills. Also consider what your position, if you decline the redundancy, may look like as the goal posts may have changed in many ways."

Tim Crowden: "Often the option of voluntary or involuntary redundancy can have greater clarity if you are prepared. A five or 10-year career plan — with a clear goal — can turn life’s turbulence, such as the offer of a redundancy, into an opportunity rather than scrambling and being reactive to such a big decision."

What's the likelihood of getting another job?

Dale Monk: "Before you take the parachute, be realistic about your prospects — are your skills currently transferable? Is the market currently flooded with your skills? Are you ready to make the jump from employee to business owner?"

Alan Kilfoyle: "Everyone should anticipate that redundancy, voluntary or otherwise, can happen to them. You must at all times keep your skills, qualifications and resume updated and relevant and your contacts and networks fresh and alive, and always be in the best position to make a move if the need arises."

If you stay, prepare for things to change for the worse

Robert Cugno: "Businesses never consider redundancies when things are going well. Take time to consider the impact the redundancies (especially mass redundancies) have on the business. Some noted impacts will be an immediate and long-term workplace culture change and not for the better. Expect an increased workload as "the work still needs to get done", as well as increased levels of anger and frustration, significantly reduced job satisfaction, and sometimes "survivor remorse". You need to decide if this environment is one in which you will thrive.

Sophia Poulos: "The talk around the office may be: ‘who’s next?’. The uncertainty that surrounds the situation can impact an individual and the workplace environment can become quite toxic. When this happens, it may be a good idea to consider taking the voluntary redundancy, if this is a reasonable option. One’s mental health is a very important asset."

Consider the Covid-19 factor

Gillian Kelly: "It's certainly not as simple as it was before Covid-19 when it was a candidate's market. I encourage people to get advice (financial, legal and career) before jumping rashly. Not all industries will bounce back as we hoped. Some not for quite a while."

Claire Pisani: "Do you want to leave your role during Covid-19, without the conventional stigma around job loss? The post-Covid-19 world will be different. It’s worth considering what you would really like, and identify some avenues to get there."

Think about the money

Cameron Read: "Pragmatically, the first thing to consider is the size of the package. How long will it provide you to be able to source a new opportunity? And given the current environment, I'd consider doubling the normal time taken to find a new role in your industry."

Lois Freeke: "A voluntary redundancy may offer incentives that a compulsory redundancy will not. With your accountant, carefully plan for how long a redundancy payment could support you, vs. the job market prospects for you currently."

Richard Taylor:

"You may want to consider starting your own business or buying a business with your redundancy payout." 

Will you be accepted if you do apply?

Ally Smart: "Redundancies target a specific bracket of staff even though it may be open to all. If you note the pattern, then you’ll know if the redundancy round may pass you by. Sometimes the longest serving team members are the main target. The company is using the economic hiccup to change the landscape. In others the longest serving are protected, because it is more costly to payout than to keep them on board. Gather your evidence, and read the signs, before you raise your hand."

Just need someone to tell you to go for it?

Shilpa Kulshrestha:

"I would say not to give it a second thought. This is the opportunity — take that money and get started to build your life of choice."

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