Trading Places

Inside views on the jobs market

When it pays to take a break

November 11, 2008

Usually when a company announces dreaded plans to “cut costs” or “restructure”, it’s a sure sign a new batch of employees are about to be axed. But in a refreshing new take on saving money in the corporate world, one company has decided to move in a decidedly unique direction.

The term is “career break“, a solution that Irish Life & Permanent’s banking division has come up with in a bid to slash costs, not jobs. The plan offers employees $25,000 to $45,140 to take a 2- or 3-year “break” from their jobs, thus cutting expenses without actually firing anyone. The company didn’t say how many employees are planning to accept the offer — nor did it mention whether said jobs would still exist after the “break” was over — but it hopes the plan will appeal to bankers looking for more flexibility in their careers.

Irish Life may be on to something — at the very least, it may prevent some nasty lawsuits. More and more financial firms are being legally targetted by disgruntled ex-employees seeking lost wages and benefits, lawyers say.

Granted, most firms are still taking the old-fashioned approach to cost-cutting. Sources say Goldman Sachs — already on a firing streak in recent weeks — is planning to cut another 10 percent of its investment bankers in Tokyo. In Russia, the recent rash of deep job cuts prompted one banker to say, “The best bonus you can have in Moscow right now is to have a job at all.”

And there’s more on the way. As nervous investors yank money out of their investments, mutual fund companies are bracing for the next hit. Experts say job losses at U.S. asset managers could rival layoffs in the last big bear markets of 2001-02 and 1991-92.

Kind of makes a “career break” sound appealing.

Would you take your chance on a career break, even if your job wasn’t guaranteed? Share your thoughts below.

Comments

A cash incentive for a career break sounds like a terrific idea. For many employers a shorter term, less expensive, option for a week or two off without pay would also be helpful. See my blog post, “Would your employees like an extra week off; without pay?” on http://www.allbusiness.com.

 

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