We Have Some Lovely Parting Gifts – Part 2
The pandemic has accelerated the end phase of the careers of millions of Baby Boomers and Gen Xers, pushing them to a decision to retire earlier than planned or find other employment options. This is the second of a two-part article about managing the end of one’s career. Part One focused on corporate strategies and the practice of offering Voluntary Exit programs. This article contains insights on how the individual employee is impacted by re-organization initiatives, with advice on how to reach the career finish line successfully.
Workers who are candidates for a Voluntary Exit program can experience a range of emotions when they first are informed about their eligibility. The first reaction is typically relief that it is not a layoff, meaning involuntary separation. Matt, a 57-year-old manager for a financial services firm, remembers the shock of being informed that he was eligible for a Voluntary Exit package. “It came out of the blue, just an email from a corporate HR person I had never heard of.” Once he understood that it was a buyout opportunity the next reaction was stress, feeling like he needed to make an important life decision in the next three weeks. And then isolation, having been instructed not to discuss the matter with his manager, colleagues, or other people in the company with whom Matt has built a long, trusting relationship.
This calls out the fundamental difference in company intention and the employee experience with the Voluntary Exit process. From the company standpoint, it’s a financial decision and just business, not personal. The compensation package is usually generous in order to increase the likelihood of acceptance. But from the employee standpoint, it’s not just business, it’s entirely personal. Internal reflections on what the employee has contributed to the company’s success, feeling valued and appreciated (or not), the friendships and battle scars shared with colleagues, self-identity with a company that one has worked for half of a lifetime; these are factors that often outweigh the monetary incentive.
And then there’s the most personal decision of all: if you accept the Voluntary Exit offer, what are you going to do after? If you’re not ready for formal retirement for another 7 to 12 years, do you want to bring your talents to another company and learn a whole new corporate culture? Or is this the opportunity to pursue a completely different vector in the remaining years of your working life? Do you have an appetite for risk, and a comfort level of not knowing when your next paycheck will come? What will your friends think? What will your spouse think? What do YOU think?
Matt took the full three weeks to ponder all the options and speculative outcomes. Ultimately, he decided to decline the Voluntary Exit offer, as “the financial incentive was attractive, but not enough to push me over the edge. I like my job, my colleagues and the company, and I really could not envision what else I would do.”
It was an easier choice for Julia, a 60-year-old marketing director for a major consumer products company. Six months after the pandemic began there was an early retirement package offered to over 1,000 managers globally, and not enough people were enticed to accept. “The two things that made me say yes was that they increased the financial comp by 40%, and at the same time I was contacted by a recruiter who put me together with an early-stage company that wanted an experienced manager to lead their young marketing staff.” Even with a slight reduction in salary, Julia says “I come out way ahead, and more important is the energy boost that I get from building a new business. Work is exciting again.”
When companies implement a Voluntary Exit program in a strategic and intentional way, it greatly improves the employee experience and the prospects for the rest of the organization longer term. Brenda (age 56) has worked for the same major insurance company for 34 years and is still totally enthusiastic about her job. Last fall, the company made an Early Retirement Offer to employees over the age of 55 who had at least ten years of continuous recent service. When Brenda was notified of her eligibility, her first reaction was, “Not for me, this program is really meant for ‘older’ people who are much closer to retiring.” Plus, she hadn’t yet done much in the way of financial or retirement planning. Before she was asked to make a decision, her company provided an exemplary level of support that included access to financial advisors and modeling of each employee’s 401-K and pension plans through retirement age. The employees who accepted the ERO package in Brenda’s department established weekly calls so that that team members could share their questions, concerns, and discoveries from internal and external sources of information to help them navigate through the process.
Proving the truth behind Be Careful What You Wish For, almost every eligible employee in Brenda’s department accepted the ERO. While a massive departure of experience and expertise might be disruptive (if not catastrophic) for most companies, this company anticipated this outcome as part of its succession planning work. There are staggered end dates for the offer acceptors based on their departmental needs that run through end of 2021. Brenda’s release date is end of October, a full year after she accepted the ERO; during this transition time she is downloading her expertise to younger team members. Much as it pains her to think about leaving a great job and beloved teammates, she is philosophical about change as a necessary part of growth. “I definitely could have stayed happily for another 10-12 years, but it’s time for the old guard to roll out, for the new guard to step up.” She is confident about her potential value to other companies and “won’t accept a low-ball offer.”
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In Part One of this article, I used the metaphor of a Chinese finger trap to describe the predicament of older workers trying to complete their careers intact. The secret to get out of the Chinese finger trap is to use technique, not effort, and the same is true for end-of-career maneuvering. Workers in their late 50s and early 60s can be so fixated on the possibility of a mass layoff that they may not realize they can be pro-active about options that they can control. Here are some ways to prepare for exiting a long employment run on your terms:
- Get more out of the performance review process. Too many workers (and managers) treat this annual ritual like a kidney stone: painful to go through, but it will pass. You can be intentional about using the performance review to get an objective assessment about your strengths, development opportunities, areas of contribution, leadership capabilities, and other performance attributes that can help you understand your value to the company plus the degree to which you can re-establish employment outside the company if that situation were to arise.
- Leverage your unique expertise. Large companies that have gone through several re-organizations in the last 20 years will often be in a situation where important institutional knowledge rests with one person. If you are that person in your company, your control over the terms of departure is completely different than a person who may be a redundant resource. Assuming that you are interested in a Voluntary Exit package, negotiations with your company could include (1) extending your departure date to allow for transition/training of the person taking over your responsibility; (2) becoming a contractor, which companies that would be operationally disrupted by your departure may be open to discussing; (3) becoming an advisor, mentor, or consultant to the person(s) who will try to fill your shoes.
- Stay connected with the job market. Before your finger gets stuck in the finger trap, use it to take the pulse of your value in the open job market. Easy steps to do this include keeping your LinkedIn profile up to date, being active in industry association activities, attending annual industry conferences (even if remote!) to build your network, and touching base with old friends and colleagues for catch-up chats. The value of this becomes apparent when you are initially considering a Voluntary Exit package and face the question, “what are my other options if I leave this job?”. Experienced professionals who are really on top of their game are thinking about the “after life” well in advance of the arrival of a Voluntary Exit program.
- Understand your long-term financial situation. Most Boomers today believe that “60 is the new 50”, meaning that if you have a good job and are in good health there’s no reason to think that things won’t continue for another 10 years or more. The downside to this perspective is that it’s like viewing retirement through your car’s side view mirror: objects are closer than they appear. If you’re 50 years or older and haven’t begun to map out your retirement goals and preferences, now would be a great time to start! Many financial service companies have online self-administered tools that can gather information about your retirement goals and provide a snapshot of where you currently stand. Better yet is meeting with a retirement planning advisor who can help you sharpen your financial goals and can add greater depth to your thinking. The key is to “fix the roof while the sun is shining”. It doesn’t matter if you are proactively planning a late-career job change or reacting to an unexpected situation like a layoff or an early retirement package; for any scenario — really, every scenario — you will want to know the financial implications.
Two main messages that I would like readers of this article to take away: first, to HR leaders who are planning or implementing Voluntary Exit programs, recognize that the financial package is your primary incentive but that you won’t achieve your desired win-win unless you understand the emotional factors that invited participants are encountering in their decision process. And second, to individuals who are offered a Voluntary Exit, recognize that this is not a verdict on your contributions to your company or your value as a person. Especially if you’re a Boomer with a lot of tread left on your tires, you have many avenues to escape the late-stage career trap.
Tim Guen is President of CareerMap and blogs frequently about the challenges of managing careers during the pandemic.