Many U.S. employers need to reduce their staffs in this period of economic downturn, but, remembering how difficult it was to assemble a talented workforce, they are reluctant to do so. That conflict is resulting in some very creative layoff plans.
Some cash-strapped companies promise rehiring bonuses to employees who work elsewhere for a few months. Others are "lending" their valuable employees to other firms, in hopes of eventually bringing them back. And still others are offering "sabbaticals", employment benefits and partial salaries, to workers who take time off to do other things. The trend is most prevalent in high tech and professional service industries.
To executive recruiter Mark Jaffe, such "voluntary layoffs" are clever corporate strategies. He says they enable firms to cut costs, maintain ties to workers, and avoid the acrimony that usually accompanies layoffs. He said, "It is only smart business to say, 'We are not breaking up forever. This is not an expensive divorce where I am going to pay you alimony. This is just a trial separation.' And so rather than the company feeling that they have to really compensate somebody for their loss, they can say, 'Let's still be friends.'" And yet companies seem to have no trouble finding volunteers.
Larry Solomon of Accenture, a global professional services firm, says that is because the voluntary layoff terms are quite generous. "Essentially," he said, "the people can do whatever they want to do for a six to twelve-month period provided that they do not work for a competitor of ours. Every individual will receive 20 percent of their salary, will continue to receive benefits, will continue to use our communications network, their laptops, and receive profit sharing allocations."
Accenture also guarantees layoff volunteers their old jobs and salaries when they return. Mr. Solomon says many employees have jumped at the opportunity. Mr. Solomon said, "We have an individual who is going to be backpacking through the Himalayas, an individual who is going to be going to culinary school, an individual who is going to learn how to speak Chinese. We have lots of people that are going to be doing volunteer work. We have people who want to try starting their own business."
Ironically, Mr. Solomon says, the present economic downturn is giving many workers an opportunity to try new adventures.