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Employers should
factor in the provision of personal financial advice ahead of implementing
voluntary redundancy programmes, say financial consultants Watson
Wyatt.
Watson Wyatt believes that few people who are offered voluntary
redundancy are properly able to weigh up the financial costs and
benefits due to the complexity of the redundancy package, in particular,
pensions.
According to the 2008 National Management Salary Survey, management-level
redundancies are back on the agenda for more companies, and are
running at their highest level since 2001.
Mick Calvert, head of the financial planning group at Watson Wyatt,
commented: “The fear that they may be making a costly financial
mistake can hold many people back from taking redundancy so providing
up-front financial advice can do much to smooth the process of a
voluntary redundancy programme.
“We believe it is vital to help employees have a solid understanding
of the full financial impact of taking redundancy before taking
the big decision,” he added.
Watson Wyatt says that the cost of providing financial advice in
advance can be manageable through the use of financial education
seminars, which may be followed up by individual counselling for
those close to making a decision and requiring specific guidance.
Calvert said that while taking redundancy is a huge decision to
make, it is important to have information that is accessible and
clear. “Not only does it make it more likely that the right
people will step forward it ensures that the employer brand is not
put in jeopardy,” he added.
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Pensions Age July 2008
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