Letting go good employees: The trend of golden handshakes

Top performing employees, usually talent on board after acquisitions, being let go with a fat paycheck and a thank you letter from the organisation is rather unusual. Here is what is happening in corporate India. 

Hard working employees are often felicitated within a company and sometimes appreciated in the most unusual way even in the time of corporate crisis too. India Inc is silently, but increasingly, employing the idea of a golden handshake while letting go of top performers, usually taken on board while acquiring another company. Here is what recently happened at two large companies:

Real-life tales:
An electronics giant: This MNC had acquired an ailing firm a few years ago. At the time of merger, all employees of that firm were taken in the new fold. Gradually the original teams were trimmed. This year, the parent company called in the top performers and top line managers of the firm it had acquired. They were felicitated as being best employees around but since the business directives didn’t allow, the company had to let them go. This announcement came with buffer salary packages and hefty compensation packages to the tune of Rs 30-35 lakh. This amount was handed over to a mid-level manager and the company promised that in case of future vacancies, they would consider these employees first and also that they would put it a word for these employees wherever needed.

46444054An FMCG giant: This homegrown company bought over a popular cosmetics company. The staff of the acquired firm was told to find employment elsewhere. A handful of those employees, mostly top performers, were called and handed over a grand compensation. A zonal manager was awarded a package of Rs 60 lakh.

The concept:
This is a new way in which the company has to lay off good workers but in a manner which is not painful or hurting for the employees and does not botch the company’s image. You don’t have it happening daily but when it does, the employees being laid off and the companies both remember this sequence with dignity.

Recruiting from Antal Partners’ Managing Partner, Anil Dev had a point to make here. “This is the only and the best solution in such situations. It gives employees some time and security as well. In fact, the current market firmly believes in ‘Love your job and not your company’. In such scenarios, employees too are prepared to accept the decision of the company and move on rather than burn bridges and strain relationships with the company by resisting the decision,” he says.

When asked about any such other practices being around, he said that till now, there aren’t any such practices prevalent known. This one was unique but certainly important.

The Pros:

  • Employees gets paid well
  • Employees get buffer time to find new jobs
  • Employees feel rewarded
  • Employers feel being just to employees

The Cons:
It makes money as a leveller for employees who have a larger stake in the company other than compensation. For good performers, promotions and bright future matter as much as financial consolation.

Anil Dev has an insight here. He says, “Employee being laid off has to look for a new job in a highly-competitive segment. There is an uncertainty as to when the individual would find the next job. Also, the entire hiring process at the senior level may take a while. In such a situation, the thought process of the individual is to first mitigate the situation of financial instability caused due to loss of job (on a priority) and later look for another job and therefore a fat pay cheque in such a definitely does matter.”

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About Antal India Recruitment Blog

Founded in 1993, Antal International is a global Executive Recruitment firm with 120 offices in more than 30 countries We work with professional and managerial talent worldwide. works with many of the world’s most successful and ambitious employers. In January 2007 Antal International established the first office in India, which led to the opening of 38 offices in 14 cities. In 2013, Antal named Joseph Devasia as its Managing Director for Antal International Network, India – the man who brought Antal to India 9 years ago. Antal India today has 100+ consultants working across offices in India filling more than 3000 assignments at the mid – senior level. Antal India today has offices specialising in various industries like FMCG/CD, Ecommerce, IT, Pharma, Auto, Engineering, Manufacturing, Real Estate, Construction, Retail, Oil & Gas, Aerospace, Defence. Clients: Over the past 22 years, Antal has worked with over several thousand clients making 60,000 placements. Antal extensive network of offices and deep market expertise is what sets Antal apart from its competitors. To know more about us – www.antal.com

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