A bird in the hand?
Discussion
A friend of mine currently falls within his firm's redundancy consultation period. His company has been for sale for some time and the end is nigh, hence the possibility of job losses.
He could potentially be offered a new job as he has reached 2nd stage interview with very positive response from 1st interview.
Great, you might think.
Here is the catch:
To reduce the risk of 'key leavers' when the sale announcement was made his firm put in place a retention bonus which has been accruing to the point is worth nearly 7 months net pay to him - this would be lost if he resigned.
On top of that is an 'enhanced' redundancy package, if he were to have the chair pulled from under him. This would be worth an additional 6 months pay (with the first £30k tax-free).
And finally, his SAYE shares could be sold tax-free as a 'good leaver'.
All-in-all, it is not just a few thousand pounds wind-fall. If he stays, it is definitely at a minimum a decent chunk of cash, and potentially a significant sum.
So his question to me is, and my question to you is - what would you do?
The potential new employer wants to move quickly to fill the position and have made it clear if the timing does not work he might be ruled out because of that. Does he sacrifice that potential money to secure work?
I said to stick it out as if it all falls right for him, he will have plenty of time (and cash to cover himself) to find another job and not to just take the first one that comes up out of giddiness!
He could potentially be offered a new job as he has reached 2nd stage interview with very positive response from 1st interview.
Great, you might think.
Here is the catch:
To reduce the risk of 'key leavers' when the sale announcement was made his firm put in place a retention bonus which has been accruing to the point is worth nearly 7 months net pay to him - this would be lost if he resigned.
On top of that is an 'enhanced' redundancy package, if he were to have the chair pulled from under him. This would be worth an additional 6 months pay (with the first £30k tax-free).
And finally, his SAYE shares could be sold tax-free as a 'good leaver'.
All-in-all, it is not just a few thousand pounds wind-fall. If he stays, it is definitely at a minimum a decent chunk of cash, and potentially a significant sum.
So his question to me is, and my question to you is - what would you do?
The potential new employer wants to move quickly to fill the position and have made it clear if the timing does not work he might be ruled out because of that. Does he sacrifice that potential money to secure work?
I said to stick it out as if it all falls right for him, he will have plenty of time (and cash to cover himself) to find another job and not to just take the first one that comes up out of giddiness!
AJS- said:
Depends on his circumstances, how easily he would find something else and the exact numbers involved but getting near enough a year's salary tax free (if I read it right?) would be hard to turn down.
30's, wife and two kids, mortgage etc. Would not be life-changing but would cement a good future for all concerned. Like me, a Chartered Accountant so plenty of work around I reckon.Personally I'd hold off and see what happens.
As you've said, that amount of money could certainly 'firm' up his finances and make the next 30 years more comfortable.
What's the worst case scenario? He stays, doesn't get made redundant. Well he can start looking for a new job without time being a factor.
Best case? He stays, gets redundancy very quickly and takes the new job.
Middle of the road? He stays, gets made redundant, misses the boat on the current offer, takes a month or two off while looking for another job. The payout will ensure he doesn't get hurt being without a wage for that amount of time.
So yeah, I'd stay and try to engineer the push.
As you've said, that amount of money could certainly 'firm' up his finances and make the next 30 years more comfortable.
What's the worst case scenario? He stays, doesn't get made redundant. Well he can start looking for a new job without time being a factor.
Best case? He stays, gets redundancy very quickly and takes the new job.
Middle of the road? He stays, gets made redundant, misses the boat on the current offer, takes a month or two off while looking for another job. The payout will ensure he doesn't get hurt being without a wage for that amount of time.
So yeah, I'd stay and try to engineer the push.
The other option I thought of if he did get an offer and it was a role he really liked was to try and build a business case for voluntary redundancy. Again though, main issue is timing as I don't know how long that would take.
Just to add to your succint summary, the worst case is he doesn't get made redundant under the enhanced package, the company gets bought / broken up and he gets made redundant with statutory compensation (I don't know the exact rules in these situations).
Just to add to your succint summary, the worst case is he doesn't get made redundant under the enhanced package, the company gets bought / broken up and he gets made redundant with statutory compensation (I don't know the exact rules in these situations).
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