Voluntary redundancy
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Voluntary redundancy (VR) is a financial incentive offered by an organization to their employees with the purpose of attracting volunteers to leave the organization, due to downsizing or restucturing situations. The purpose is to get around union employee regulation laws.
A Voluntary Redundancy programme is often not driven by short time revenue goals. In contrary it's rather a question of strategic choices to, for example, change the age structure within the company. It's quite often said that Voluntary Redundancy is a consequence of a company’s lack of structural capital which is a part of the intellectual capital (IC). According to research, people who accept voluntary redundancy tend to return to the company after a while and influence the company with new ideas.
The difference between voluntary redundancy and other programmes is that VR often is offered to a selected age group. For example, everyone between 40-50 years with atleast 5 years experience.
A world wide company which recently used a VR programme is LM Ericsson, also known for the partnership with Sony, in spring 2006. They offered the programme to 17 000 employees in Sweden between the age of 35-50. They received 12-16 months full payment, 50 000 Swedish crones and a course in entrepreneurship and/or job hunting support. The goal was that a maximum of 1000 employees would accept the programme.
