A Recession - what do I do now?

I recently received a call from a former employee of a major Fortune 500 firm asking what opportunities might be available to him. As we spoke, I started to ask him some questions about his interests and what were the circumstances surrounding his departure.

He said that he was with this firm for over 30 years and they offered him a buyout package. He then went on to say that he had maxed out his retirement benefits and was grandfathered into their health care plan, pausing for a second, he asked a rhetorical question, "What was my incentive to stay"?

An interesting response.

Unfortunately, this is typical of too many companies. There is a downturn in the market and expenses need to be cut quickly and the knee jerk reaction is to give buyout packages to your most expensive and seemingly expendable employees, typically Baby Boomers.

This may appear to be the most rational and effective short term strategy; however the long-term effects could be devastating. Organizations need to analyze their workforces and really understand that retaining their key people, regardless of age, is more important that just cutting costs.

Organizations can strike a balance between cutting costs to weather a recession and staying competitive. An analysis of employee appraisals (making sure to keep a blind eye to the age of the individual) can be one way to effectively separate the top performers from those that are less productive. The other advantage of this strategy is reducing your liability as you now have a documented system for your layoffs and,best of all, you get to keep your most productive employees!