Should you take a buyout?

Chris Wodke

www.summittrainingpublications.com

With companies shedding jobs, you may be offered a buyout package to leave your organization. If you have a choice you may be wise to turn it down. With job creation stagnant you may have a tough time replacing your job.  The real unemployment rate is close to 16% and millions are coming to the end of their benefits. If you like your job, hold onto it with both hands.  If you don’t like your job it may make sense to take the buyout under these conditions:

Retirement

If you are close to retirement and the buyout will bridge the time, then give the offer a close look. You will not need retraining or the outplacement services usually offered as part of these packages. You may be able to negotiate a larger buyout amount as a result.  Be sure to consult a financial advisor to be sure you have enough money to retire.

Marketability
How easy will it be for you to find a job?  Are you in a high demand field?  Do you have recruiters calling? How is your network?  Are you well connected and well known in a growing industry?  If so you may have a short period of unemployment.  If you have not been on the job market for awhile you will have a lot of work ahead of you to secure a new position.

Geography
The market is hot in Washington D.C. due to government growth, not so hot in Detroit due to auto industry troubles.  If your area is hard hit you may also have trouble getting a job.  Check the unemployment figures and job listings for your area, before you make any decision.

Relatives
You may have a relative with a business or connections to a business that will employ you. This could be until the economy improves or permanent employment.  Be certain the offer is still there and the pay will be enough to meet your needs.

Spouse/Significant Other
Your spouse or partner may make enough to cover your joint expenses.  If this is the case discuss with them the possibility of taking the offer.  You should both be prepared for a prolonged period of unemployment and you should be dedicated to securing another job. The fact their income covers expenses takes some of the pressure out of the job search.

Small Business
Do you have a part time business you are currently running in addition to your primary job?  Could this business be ramped up to replace the income you will be losing? The buyout may be just the opportunity you need to turn the part time business into a full time one.  Use the buyout for living expenses while you build your business. Resist the urge to treat the buyout money as a windfall. You will need this money for expenses as you grow your small business.

Consulting
Do you have skills that lend themselves to consulting?  If you are well connected and well respected you may be able to create your own employment through consulting. If you have done some consulting or temporary work already, you may be ready to work for as a consultant full time.  Employment through a consulting firm may also be a good idea.  Some occupations like financial services, training and quality are good options for consulting.

School
Maybe you are just a few credits short of a degree. If that degree will substantially increase your earnings, think about returning to school. There is also stimulus money available to help pay for education and training. Make sure the degree you are getting will be marketable.

To make a good decision about taking a buyout you will have to consider both your quality of life and your needs.  Look at your monthly expenses and determine if unemployment compensation and your savings will cover your expenses.  Investigate the job market in your area to determine how long it might take to get another job.  Weigh the options and then make the best decision for you and your family.

Copyright 2012 Summit Training Publications

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