I had an interesting conversation today about the issue of Voluntary Redundancies (VR) and whether they are a good thing or not.
The organisation in question is a large one and of the financial persuasion… yes, it is a bank.
It’s one of those banks that we, the Great British Taxpayer, now own a huge proportion of.
To be fair to the bank in question, the person I met with explained the restructuring programme the organisation had been through in order to get to the point that it had a cost base it could deal with and financial ratios which allow it to lend again after a year of looking for any excuse not to lend.
But here was the interesting bit…
Many of the staff had to complete application forms for their own (or new) jobs which were then scored to see whether that person was going to be kept on. On the application form the staff member had to indicate their top three preferences for jobs and whether they would like to be considered for voluntary redundancy.
The issue the bank ended up with was this…
Everybody they wanted to keep – i.e. the ones who were good at their jobs wanted to be considered for VR and all the ones who weren’t so good wanted to stay on.
Why is this?
It’s a pretty simple answer really. The ones who are good know they are good. They would like to take their two years salary because they know they will be able to get a job elsewhere pretty quickly.
The ones who are not so good know (at least in their heart of hearts) that they aren’t so good and will have trouble getting another position.
So, the bank is left in a dilemma.
The people who are good are kept on, but are now unsettled and want to leave. The people who are not so good are kicked out, but actually could have been kept on and managed out at a fraction of the cost!
An interesting position to be in and my heart bleeds for the difficulty the bank finds itself in.
Although, I do have to be fair and say that the business seems to have made the right choices in terms of strengthening the team… the next thing is to make sure the team integrates properly to make sure there aren’t lots of leavers in eighteen months time.