Volunteer program, job cuts

When companies need to reduce staff, redundancies are often considered the most obvious solution. However, voluntary redundancy programs can be an attractive alternative: employees are given the opportunity to leave the company voluntarily under defined conditions, while the employer can strategically manage the workforce reduction.

If designed correctly, a voluntary program can combine economic interests with a more socially acceptable separation process.

The emphasis, however, is on "properly designed." A generous severance offer alone does not guarantee a successful program. Without clear target groups, transparent terms, and professional management, there is a risk that precisely those employees who should be retained will leave the company.

What is a voluntary program during job cuts?

In a voluntary severance program, a company offers selected employees the option of mutually agreeing to terminate their employment. This is usually done through a termination agreement. The offer often includes severance pay and other benefits, such as support with career reorientation.

The crucial difference to a dismissal for operational reasons lies in the employees' freedom of choice. They can weigh up for themselves whether the offered package and a career change are suitable for their personal situation.

This voluntary nature also changes the psychological starting point. Instead of being solely confronted with a decision made by the employer, those affected retain some control over their next step. This can significantly increase the acceptance of a restructuring.

At the same time, voluntary participation does not mean that a company should forgo control. On the contrary: one of the most important success factors is the careful definition of the group of participants.

Don't just open the program for everyone.

At first glance, a volunteer program sounds particularly fair if every employee can participate. However, such a solution can quickly become problematic for the company.

Because employees who are particularly willing to change jobs, are highly qualified, and in demand on the job market often have the least reason to turn down an attractive offer. In the worst-case scenario, the company pays severance packages to employees it urgently needs for its future organization – while overcapacity persists in the departments that were actually affected.

Therefore, it should be clear before the start which positions or employee groups will be affected by the future staff reduction and which skills absolutely must be retained .

Many programs also employ the principle of "double voluntariness": both the employee and the employer must agree to a departure. This protects key positions from unwanted exits. However, this principle should not be used to retrospectively correct a fundamentally unfiltered program. Someone who has already mentally decided to leave and subsequently receives no approval from the company may not simply return to their previous work routine with renewed motivation.

A good definition of the target group is therefore usually more effective than offering the broadest possible range of products and services.

The terms and conditions must be attractive – but above all, understandable.

Naturally, the financial structure of a voluntary severance program plays a central role. Severance payments are often combined with additional incentives to encourage employees to make an early decision.

Companies should resist the temptation to develop overly complex models. Diverse factors, numerous special rules, and calculations that are difficult to understand can quickly breed mistrust.

Employees want to understand why they receive a particular offer and how it came about. Therefore, it's not just crucial that the terms and conditions are economically or legally sound – they must also be comprehensible and perceived as fair .

The same applies to the decision-making period. If it's too short, unnecessary pressure arises. If it's too long, uncertainty spreads throughout the organization. Employees need sufficient time to realistically assess their financial situation, their personal plans, and their job prospects.

The biggest question is often: What comes next?

This is precisely where it becomes clear why a volunteer program should not be viewed solely as a financial offer.

For many employees, the amount of severance pay is only one part of the decision. At least as important is the question of their future career. Someone who has worked for the same company for ten or fifteen years may not even know how in demand their skills are currently on the job market, which positions are suitable, or how long a job search might take.

If a termination offer is simply placed on the table and employees then have to decide on their own, this uncertainty often leads to decisions being delayed or offers being rejected as a precaution.

Independent career counseling or outplacement consulting can make a significant difference here. It helps employees to realistically assess their own job market situation and develop possible next steps.

The consultation should explicitly not aim to persuade employees to accept an offer. On the contrary, good consultation creates a sound basis for decision-making. For one person, this might mean accepting the offer and pursuing a new career path. For another, the right decision might be to remain with the company for the time being.

Professional management determines success.

A volunteer program can be excellently designed on paper and still fail in implementation.

Especially with larger programs, HR and management need to know at all times which employees have already been contacted, who has received an offer, who is still in the decision-making phase, and how many departures have already been agreed upon.

Termination agreements, severance pay calculations, and potential additional benefits should also be prepared before the first discussions take place. If conditions are changed multiple times during an ongoing program, or if comparable employees receive different information, rumors and doubts about the fairness of the process quickly arise.

At the same time, acceptance rates shouldn't be evaluated only at the end. If it becomes apparent early on that certain target groups are accepting offers significantly less often than expected, this could indicate problems with terms and conditions, communication, or decision support.

A volunteer program is therefore less of an administrative HR process than a demanding change project.

Why communication is so important

Restructuring is inherently fraught with uncertainty. A voluntary program should not exacerbate this uncertainty.

Managers must therefore understand how the program works, why it is being implemented, and what statements they can make to employees. Conflicting information from HR, management, and the executive level damages the program's credibility particularly quickly.

At the same time, interested employees need confidential ways to ask questions. Not everyone wants to immediately signal to their manager that leaving the company is a possibility. External contacts or confidential counselling services can play an important role here.

It is particularly problematic to introduce a voluntary severance program only after redundancies have already been effectively decided. This quickly creates the impression of sham voluntariness: employees can still choose under what conditions they leave, but not whether they leave at all.

If a voluntary program is to gain genuine acceptance, it must therefore be part of the restructuring strategy from an early stage.

Outplacement as a meaningful component of the volunteer program

For companies, it can be beneficial to combine the severance offer directly with professional career or outplacement counselling.

This gives employees not only a financial option, but also a concrete perspective. They can refine their career goals, assess their job market opportunities, update their resume and LinkedIn profile, develop their application strategy, and prepare for interviews with potential employers.

Especially in voluntary programs, this support can be valuable even before a final decision is made . The better employees can assess the opportunities available to them outside their current company, the more informed their decision can be about the offer.

For the company, such support can help to make the entire separation process more professional and respectful.

Conclusion: Volunteer programs need clarity, not a scattershot approach.

A voluntary redundancy program can be an effective alternative or preliminary step to redundancies. It combines the necessary adjustment of personnel capacities with a greater degree of self-determination for employees.

However, the instrument's success is not solely due to an attractive severance package. Crucial factors include a clear organizational structure, carefully defined target groups, transparent terms and conditions, consistent management, and communication that provides employees with guidance.

And above all, the professional future of those affected should not only become an issue after the contract has been signed.

Restart Career helps companies supplement their voluntary programs with independent perspective and outplacement consulting. This provides employees with a sound basis for making decisions and – if they decide to leave – concrete support for their next career step.