Early Retirement Blog

How to prevent layoffs at your company? If you are an H.R. manager, searching for ways to reduce labor costs without conducting layoffs, almost all your options are negative.

Pay cuts
Furloughs
Decrease Health Care Contributions
Eliminate 401k Matching

While taking these actions may prevent layoffs, they leave your employees financially worse off, and decrease morale within the organization.  What about offering your employees a voluntary early retirement incentive package to prevent layoffs?

A voluntary early retirement incentive package is the one solution to prevent layoffs, and reduce labor costs, that benefits everyone.

Many companies hesitate to offer their employees a voluntary early retirement incentive package, out of fear that not enough employees will take the organization’s early retirement offer, and  after wasting time and money the company will end up laying off employees anyway.

That’s too bad.  Both the employer and employee are missing out on an opportunity to prevent layoffs.

The Problem

The  reason many employees refuse to take an early retirement incentive package offer, is not necessarily because the employee does not want to retire, but because the employee is afraid that even with a generous package, they won’t be able to successfully retire.

Employees are being asked to volunteer to leave the security of their job, and  face the uncertainty of retirement, or take the chance of surviving a layoff.  Most employees do not have a retirement plan and no idea how much savings they need to retire.

The decision to take an employer’s early retirement incentive package is a life-changing, and usually, permanent event.  Without knowing if they can successfully retire, it’s no wonder many employees  refuse the employer’s early retirement incentive offer.

The problem with voluntary early retirement incentive packages,  beyond giving employees an offer, employers do nothing to actually help their employees take the offer.  Nothing to help their employees overcome the fear and insecurity that comes with a “voluntary” early retirement.

The Solution