Last Updated Dec 13, 2010 6:34 AM EST
I'd welcome some help playing the odds on an HR issue: My company employs 5,000 or so people. We're not attracting much new business, we're losing some current business, it's hard to get direction on priorities, and we're running very, very lean.
Some of us staffers speculate whether the company will even survive long in its current state. And I wonder if I'm an idiot to wait and see what happens.
What I'd like to ask you is: When a company folds, are employees always left high and dry or is there sometimes hope for vacation payout, severance, or anything else besides unemployment? If a weak company is acquired by a stronger one, but the duplicated positions are eliminated, is it usual that the new company honors the severance guidelines of the old company, or provide any kind of package?
My usual strategy under such circumstances would be to bail ASAP, but my boss is wonderful, I am learning a lot, I'm paid well, and--oh, yeah, the economy stinks.Ahh, gambling. Some people enjoy it. I hate it. I always feel like I could handle just about anything if you just tell me what it is. But let's talk odds.
80 percent of companies offer severance, according to a 2007 study. I don't know how much, if at all, that has changed lately. Most companies base their severance pay on years of service.
If a company completely folds--completely goes under, they are more than likely to be in that 20% of companies that don't offer severance. After all, they have no money and are probably in debt.
Now, what about having your company purchased by another company? Well, that depends on the companies involved and what went into the sale agreement. Severance is not required by law in all but a few cases, so there's no guarantee about anything.
If you are offered severance, you'll undoubtedly be required to sign a general release in order to receive the money. This is a legal document where you agree not to sue the company and they agree to give you money. It may also place restrictions on you, such as limit your right to talk to people about your severance, reapplying to the company or what references they will give you. It may also lift restrictions, such as non-competes. This is a binding, legal document, so don't go signing it until you've had someone knowledgeable in this area look it over.
My understanding, though, is that if a company folds, the employees are nothing more than creditors for unpaid salaries, vacation, etc. Sure, they legally owe you the money, but if they don't have it, they don't have it.
So, what would I do, if I were you? (Besides panic, I mean.) There are 5 things to do when you are expecting a layoff.
- Start looking for a new job. This is not the act of sending out your resume to any job that looks like you could do 2/3 of the core function. This is a slow and careful job search. You have a job right now, so don't give it up for something inferior (unless it begins to truly look desperate). Remember, companies want to hire the best person for a job, so take your time to find the job you'd be best at.
- Learn, learn, learn from your boss. You say you have a fabulous boss. This is not often heard in his column. We normally get bosses who overwork, bully, take credit for your work, or are racists. I know, people without problems don't write me, but a good boss is worth his/her weight in gold.
- Work towards a solution for the company. I don't know what you do, but everyone can contribute to the company's success. Start working on a plan to either generate more revenue or spend less money. The powers that be are probably focusing on one area and forgetting that there are other areas as well. If you like your job, work hard to make sure it stays around.
- Save, save, save. I wish I could guarantee you continued, high paying employment, but I can't. So, if you're paid well now, put some away for the forecast rainy day. I don't like being the grim reaper, but the reality is I've laid off thousands of people and even some of the really highly paid people had no money saved for just such a situation. Whatever you're making now, it's more than you will be making if you're laid off.
- Ignore most of the rumors. For three years I did layoffs for a large pharmaceutical company. And, in case you were wondering, we did read cafe pharma. The posters there would write as if they spoke with absolute knowledge. "Sr. VP X told me himself that blah, blah, blah." Those statements were always false. (Or Sr. VP X lied or was uninformed himself. No comment on that.) The only time they were accurate was on the day layoffs actually occurred and then as soon as the first sales rep was notified, the correct info was posted. Unless you hear it directly from a reliable source, or you have access to the actual numbers, don't believe it.
- Got a workplace dilemma? Email your questions to EvilHRLady@gmail.com.