Best practices for navigating voluntary employee buyouts

Offering voluntary buyouts to employees, like what Microsoft did last month, raises a lot of challenges for internal communicators.

Although the voluntary nature of the proposal may generate better press than layoffs and help companies avoid accusations of wrongful termination, the problem lies in nudging someone to leave while making sure they remain engaged if they decide to stay.

An internal memo announcing voluntary buyouts at Google last year, obtained by CNBC, illustrates this tension perfectly:

“I want to be very clear: If you’re excited about your work, energized by the opportunity ahead, and performing well, I really (really!) hope you don’t take this! We have ambitious plans and tons to get done,” wrote Google senior vice president Nick Fox. “On the other hand, this VEP offers a supportive exit path for those of you who don’t feel aligned with our strategy, don’t feel energized by your work, or are having difficulty meeting the expectations of your role.”

For Montieth Illingworth, CEO and global managing partner of Montieth & Company, when an employer offers a voluntary buyout or early retirement package, there’s no going back. As soon as the message appears in an employee’s inbox, the expectation that they still have a job because the company values their work begins to erode.

“The implicit contract has essentially been damaged,” said Illingworth.

Here are three ways to create messaging for voluntary buyouts that does as little damage to workforce morale as possible.

1. Prepare for questions and confusion

Before telling employees anything, make sure key leaders are fully informed about what’s happening and why, said Kim Cerda, a managing director at the strategic communications firm HudsonLake, which was recently acquired by the PR firm MikeWorldWide.

When the news drops, they will be the ones on the frontlines dealing with a flurry of questions.

“In an ideal world, there’s going to be an announcement that goes to everyone at the same time,” said Cerda. Immediately after that, however, “the department or division head should be ready to pull their people together to do a follow-up. Go a little bit deeper, give a bit more detail — things you can’t do in a companywide announcement.”

Cerda also stressed the importance of creating a microsite that can serve as the single source of truth for all questions and concerns. It should note who’s affected, outline the benefits being offered and include an FAQ section. It should be live the second the news breaks.

2. Present the big picture

When the time comes to make the announcement, focus on the company’s overall goals.

Explain how evolution is necessary for the business to remain relevant amid changes in consumer demand, government regulation or advances in technology.

If the company is making other big changes, such as moving a factory or reallocating resources, mention that as another outcome of the decision. Every additional line of information will put the buyouts in perspective.

Highlighting other factors “takes some of the personal judgment out of it and helps set the stage for the business’s decision,” said Cerda, who has worked with many clients on employee buyouts, both voluntary and involuntary.

By presenting the buyouts from a position of strength and leadership, rather than a reactionary cost-cutting exercise, employees who didn’t receive the offer, or did but decided to turn it down, won’t feel like they’re on a sinking ship. This helps every worker who remains onboard stay engaged. They know their leadership team is making a proactive move, not acting out of desperation.

It’s important, however, to show restraint and remain sensitive to everyone receiving this news, because, in the end, “you’re also asking people to make a decision to leave,” Cerda said.

Showing honesty, openness and dignity, Illingworth added, plays a big role in how employees receive news of this magnitude.

“Create your communications framework as if you’re sitting right across from the person at a table,” he said.

3. Turn the announcement into a conversation

Once the message goes out, companies need to be ready for significant disruption.

“The hard work begins after you announce it,” said Cerda.

She advised internal communicators to set aside time for addressing concerns and handling unanticipated issues as the buyout process plays out.

For employees offered the buyout, it’s important to have constructive conversations about what might happen if they stay, added Illingworth. It could mean a new manager or moving to a new team. It might mean taking on different projects that better align with the company’s vision.

And if they seek outside opinion from a lawyer or HR consultant while pondering the option, companies should give them ample time and space to do so.

“You have to respect that they’ll have questions that you’re not prepared to answer, and that they may want to be more informed,” said Illingworth.

As he put it: “You have to acknowledge the environment of uncertainty.”

While voluntary buyouts are difficult to pull off without someone getting upset or feeling less excited about their role at the company, Cerda noted threading the needle is possible. She’s seen it work.

And getting it right is important, she added, because “how you handle the people who are leaving is the strongest signal to the people who decide to stay.”