Considering voluntary redundancy payouts

My wife is busy today with a project deliverable but it’s obvious the major restructuring announcement at her workplace last week has taken its toll on the morale of her team. She met up with her colleagues over the weekend and it was the main topic of conversation. Everyone is looking at the new organisation structure charts and descriptions of roles (a lot fewer than before especially in Singapore). So as to work out a strategy on which jobs to apply for that give them the highest chance of landing one. Even if my wife can keep a job, she gets stuck with additional workload overflowing from the eventual lower headcount at the bank.

This led to another consideration that came up for discussion in any restructuring exercise that could lead to job losses. Which is the issue of whether my wife should just go for the voluntary redundancy payout if it is offered. It’s important to highlight the difference between a restructuring and retrenchment exercise. The former is more about achieving change with redeployment of staff while letting go of some employees. The latter is more about just cutting jobs. In a restructuring exercise, the bank looks to redeploy you in another job (even if it’s a bad one) so it can avoid offering you the voluntary redundancy payout (though this might be offered to you at the end if you are not redeployed). In a retrenchment exercise, the bank offers the redundancy payout to you upfront since you are losing your job.

I had a discussion with my wife over the weekend and she decided it’s too risky to go for the voluntary redundancy payout option. While she has worked at the bank for about 10 years and could get a decent amount based on her last drawn salary, we don’t need that payout to sustain ourselves financially if she’s unemployed. Because I still have a job and my salary is enough to cover the household expenses and more. We might not be able to invest much into the markets anymore but it would be more about sustaining the family through her unemployment than anything else. What we are more concerned about is the negative impact to her career if she loses her job now in the current economic climate and at this time in her life.

It is unlikely my wife can get an equivalent permanent role elsewhere internally at her bank or elsewhere. This could take a long time and the employment gap would hurt her career prospects. Especially if we are thinking about having another kid. No employer is going to hire someone who will be going on maternity leave months after she joins. The end result would be an even longer employment gap that could destroy her career. To prevent this, she could take up contract roles to tide her over but risk being stuck in contract roles for a while.

This happened to a contractor in her team and it’s been years since she held her last permanent job at another bank. It was a retrenchment exercise that caused the contractor’s job loss then and she didn’t think her career would be just about contract roles after that. Once you get stuck in one, it’s difficult to get change employers’ perceptions of you to get out. In a contract role, the permanent staff don’t teach you as much or assign long-term higher-value work to you. Simply because they have no idea how long you will be around and whether you are worth their time and effort to train. The corporate world is an unforgiving one and basic mistakes could cost you a career if you are not careful enough to avoid or learn from them.

It’s understandable why the morale of my wife, her team, managers and colleagues is low. They had a good run in the last few years but it’s just not possible for the bank to remain profitable and keep staff employed without making significant structural changes and cost reductions. It’s about surviving this crisis and waiting for better times to come. Her bank still remains a good place to work at and they have showed compassion and empathy in the way they handled the restructuring. They are taking on feedback from staff and giving enough lead time for people to know what to expect and react if necessary. No one likes sudden and unexpected job losses (it’s the worst).

There’s not much I can do except to provide as much reassurance as possible that our family will be fine financially even if she loses her job. She supported me greatly when I was suffering badly in the toxic work environment of my previous job. And surviving that led me to the better job I have today. It’s my turn to support her through what I think will be a defining moment in her career. We are on the way to our mid-30s and experiences like that would set the stage for which directions our careers will take. For better or worse.