Sometimes taking the option isn’t really an option. When it is, consider not jumping ship for these reasons.
Readers always ask me, “When should I take a buy-out? When is a buyout worth it?” Before I answer their questions, I always need to know these factors: How old are they? How long have they worked at the employer offering the buy-out? And most importantly, what are they planning to do work-wise afterwards? Retire? (Or as I am famous for calling it, “expire”?)
Do you personally know anyone that took the legendary package or buyout and got an equal or better-paying job? I don’t.
Oh, they land jobs, all right — but not at the same salaries or levels they were in, and often not close to their current homes. Especially during a downturn, you’re better off holding onto your job.
We’re currently deep in a recession. The unemployment rate may be leveling off, but new jobs are not yet being created, and most economists tell me that will not happen until the end of the second quarter of 2010. So that’s eight more months of very few new jobs.
The only times to consider a buyout
A buyout is almost never a good thing, unless:
- You’re about to retire
- You have a “sure thing” on the back burner
- You’re going to be fired anyway within the next year, if you don’t voluntarily leave now
Let’s not forget that the buyout is often just a disguise for the “push” or “force-out.” You need to do your best to weigh if you have any other real options. Sometimes the choice to be bought out is really no choice at all. Right?
To me, the word, “buy-out,” “package” or anything like that is a white-collar sleight of hand. Translated into reality, it means, “You’re fired; we’ll give you some dough if you sign this legal release so you won’t sue us.”
The one thing that gets overlooked
I will tell you one thing is even more important than the money from a buyout: medical benefits. Negotiate for your employer to pay for the cost of continuing your coverage for as long as possible. Do you know what contributing to COBRA costs today?
Dangling cash in front of anyone to make a decision is a no-brainer. Bosses know that money talks and influences people to make decisions they might not ordinarily make.
If the offer comes, take your time, speak to people whose opinions matter to you, ask if there is any room to negotiate or if there are any other options. And by all means, let me know what you think.