How To Conduct A Voluntary Retirement Scheme?
We all agree that each organization is different so its employees. Making a large, sweeping plan that covers the needs of everyone is a daunting task for sure. HR has to consider a lot of things in order to get the things right in case of voluntary retirement scheme. It is important to know the steps in the process to give you a better understanding of the challenges you may face and how to handle them efficiently.
Step 1- Determine the cost
Voluntary retirement scheme is an activity that is offered to reduce workforce, cost-cutting and rightsize the organization without laying off. You need to do cost analysis and figure out how much company will save and if the incentive is worth it.
You need to see is there any advantage for your company to conduct an event like this. It is recommended to look at the salaries of those who are eligible, how much the company need to shell out to buy them, what are the benefits you could offer them post-retirement.
Work in harmony with the concerned individuals such as accounting team, upper management members and CFO, you can easily prepare a sheet stating the cost benefits of conducting a voluntary retirement scheme. This step is vital to assess the need of holding an event like this and to make sure there are no other solution to the problem.
Step 2 -Eligibility
The second step is all about ascertaining the eligibility criterion. To figure out which employees are eligible for the process, Age and tenure are the two important aspects to look at while setting the requirements. An extra caution has to be taken with a voluntary retirement plan, because it could offer to individuals who you don’t want to leave. Senior leaders who are like strong pillars to the organization, can accept the offer and leave you in a rut. Make sure you are offering the incentive to the right group.
Step 3- Right communication
This step involves the communication to your staff members. Make sure you maintain a transparency as possible. Do not target the specific older group as it is against the law. It is recommended to send an email to all the employees stating “anyone who meets the requirements can reach out to HR. This step ensures that proper communication channel has been used and a proper platform has been offered in case of any questions.
Also, publish the requirements and offer on your company’s intranet. After the announcement, give the eligible members to talk to concerned people before signing it.
You can also line up meetings for those who are considering the incentives wherein they can ask question and clear off their doubts.
Step 4- Compensation benefit changes
When anyone consider voluntary retirement plan, they have to understand worker’s benefits also change after leaving the organization. For example-if an employee retires at the age of 62, their health benefits change drastically. You should always explain in detail about the benefit changes that may happen when anyone come forward to sign up for the incentive.