A $25,000 payout may feel generous and clean when it comes to trimming payroll. Kristi Noem is the head of Homeland Security’s (DHS) Department and she offers employees a $25,000 payout in exchange for their resignation .
If you are considering reducing the number of employees, you should know how much that $25,000 (or whatever dollar amount) will mean to your staff. You may buy short-term silence but long-term resentment if you don’t disclose the real value of your offer.
What’s the big deal about that severance check? That big Severance Check?
People will be tempted to accept this type of lump-sum payout when you are trying to reduce your headcount. A large cash infusion can allow people to do things that they have been putting off, like paying off their credit cards or buying a new air conditioner.
Too few employers explain that the $25,000 is after the IRS and FICA are paid, as well as the state.
Click here to continue reading: DHS wants workers to quit. The $25,000 buyout has hidden costs
