Voluntary redundancy (VR) is a financial incentive offered by an organisation to encourage employees to voluntarily resign, typically in
downsizing or restructuring situations. The purpose is to avoid compulsory redundancies or layoffs.
Reasons
A voluntary redundancy programme is not always driven by short term revenue goals. It can also be motivated by the strategic choice to change the age structure within the company. According to research, people who accept voluntary redundancy may at times return to the company after changes in the company's prospects, strategic vision, or economic climate and, in doing so, may bring new ideas.
Examples
LM Ericsson implemented a VR programme in the spring of 2006. It offered the programme to 17,000 employees in
Sweden between the ages of 35 and 50. Those who voluntarily left were given between 12 and 16 months of
severance
Severance may refer to:
Arts and entertainment
* ''Severance'' (film), a 2006 British horror film
* ''Severance'' (novel), a 2018 novel by Ling Ma
*''Severance'', a 2006 short-story collection by Robert Olen Butler
* ''Severance'' (TV series), a ...
, 50,000
kronor, and a course in
entrepreneurship
Entrepreneurship is the creation or extraction of economic value. With this definition, entrepreneurship is viewed as change, generally entailing risk beyond what is normally encountered in starting a business, which may include other values t ...
coupled with job placement services. The goal was to have a maximum of 1,000 employees volunteer for the programme.
Delta Air Lines
Delta Air Lines, Inc., typically referred to as Delta, is one of the major airlines of the United States and a legacy carrier. One of the world's oldest airlines in operation, Delta is headquartered in Atlanta, Georgia. The airline, along w ...
, in the aftermath of its
bankruptcy filing, offered a programme that included limited flight benefits for a set period after
voluntary resignation. In light of rising fuel prices, it turned back to a VR programme. The particulars of that severance package are unknown.
Delta to cut jobs as costs surge
''BBC News'', 18 March 2008
See also
*Compromise agreement
In the United Kingdom, a compromise agreement is a specific type of contract, regulated by statute, between an employer and its employee (or ex-employee) under which the employee receives consideration, often a negotiated financial sum, in exchang ...
*Golden boot compensation Golden boot compensation, also known as the Golden Boot, is an inducement, using maximum incentives and financial benefits, for an older worker to take "voluntary" early retirement. See also
*Compromise agreement
*Golden handcuffs
*Golden parachute
...
* Golden parachute
* Layoff
*Restructuring
Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Other reasons ...
* Severance package
References
{{reflist
Human resource management
Termination of employment
Organizational conflict
nl:Ontslagvergoeding