No Pot of Gold at the End of This Rainbow

With more and more companies reducing headcount a trend has emerged that has me baffled. As you might expect we’ve targeted companies that are performing poorly because they are easier to recruit from since logically many more people are looking to “jump ship”, but what we’ve seen is that while many of these potential candidates are expecting to be let go the are actually waiting around for it to happen.

The big reason….the severance package…Huh?

Yes it seems the belief of most is that a severance package and a job search are better than finding a new job now with a career path in a stronger company. From my conversations it seems that they want a security blanket for their search, but it seems like they aren't looking at all the information.

First off severance is provided for two major reasons (1) To pay a debt of gratitude to long term employees as they must massively readjust to a new market place and (2) to provide a short term financial bridge between jobs. (Or if you’re a skeptic like me it’s to control the damage to their public image created by the layoffs). Now if you’re a long term employee this may make financial sense when the industry average is two weeks of severance for every year of service, but the typical IT candidate over the last decade has had at least 2 if not 3 or 4 (if not more) jobs so what’s the payoff for these people? The answer is no much of anything!

In the current job market the average IT pro will spend 6-12 weeks looking for a job before securing their next opportunity. So while that 4 or 6 or 8 weeks of severance looks good on paper it’s either gone or mostly gone by the time you get your next job. So with no financial gain why wouldn’t you look at jobs right now? Benefits of a search now include:

* Less competition from your peers as they wait on their severance packages
*Control your destiny as you are proactively looking for your next career move and not just accepting
whatever job is available once you’re unemployed.
*Social stigma still associated with losing your job: Why them? Didn’t they see the writing on the wall?
What’s the motivation of a person who waits to be let go? (sorry to say, but these are real questions
posed by real hiring officials)

So if you’re one of those candidates in a company where you’re facing the real possibility of losing your job you may want to get ahead of the curve, and be more proactive in your search especially with no real financial gain from any severance package.

Views: 113

Comment by Maureen Sharib on February 2, 2009 at 10:16am

Bill, Not gonna happen. What Corporate America lacks in its rank-and-file is an alarming apathy that goes along with an employee mentality and that's how Corporate America wants it, never you mind what they say to the opposite. It's by design. Our schools don't encourage our kids to grow up to work for themselves - they encourage our kids to think of themselves as someday growing upand going to work for someone else. Look at any children's book that touches on careers. You'll see policemen and teachers and firemen and doctors and nurses but what you won't see are independent business people. It's one reason I LOVE the TV cartoon series Handy Manny - he's a racially diverse independent HandyMan who seems to always find work for other racially and gender diverse business people.

This blind side that has been created is a big problem, IMO and OMO (in my opinion and on my own).
Comment by Adam on February 2, 2009 at 3:08pm
Bill, great post. My question is what do you say to a candidate that is worried about leaving their job they have been at for several years and have tenure to go to a new company where, in this economy, they could be the first to go?
Comment by bill martineau on February 2, 2009 at 3:54pm
Adam,

Thanks for your comment. As for your question I can only address it from my industry (IT) perspective where LIFO hiring is really a thing of the past. Companies selection process for who to let go now starts with things like actual performance, and reduction of headcount tied to specific lines of business or projects & technology and not the old fashioned seniority/tenure based mindset.

for more details read the blog I wrote on 12/30/08 " Should I stay or should I go" here:

http://www.thevoiceofit.com/blog/2008/12/31/should-i-stay-or-should-i-go-now-that-is-the-question.html
Comment by Dina Harding on February 18, 2009 at 4:14pm
Nice post, Bill! I have seen this time & time again (people waiting for their severances). I've even known several who have waited over 18 months; these are the ones who have good tenure, of course. Just think about all of the potential opportunities they lost out on while waiting it out! People don't always see the big picture in that short term gains (severance) do not always equate to long term career growth & prosperity. Thanks for sharing your post with us! ~Dina
P.S. Maureen's post above speak volumes of truth - I'm glad others are seeing what's really happening!

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