Older employees whose personal investments benefited from the run-up in stock prices may now have a financial cushion large enough to allow early retirement. And companies with overfunded pension plans, thanks to the market, can tap the excess to help foot their early-retirement bill. Still, whether early-retirement incentives will remain a fixture in downsizings is an open question. Two forces are operating against them. One is the growing acceptance of the idea that companies need to adapt quickly to rapid changes in the economy and that they no longer bear lifelong responsibility for their employees.
Most executives look at reducing a workforce as part of business as usual.
At the same time, despite the current economic downturn, many human resources specialists foresee continuing tight labor markets, especially as the U.S. approaches a huge wave of baby boomer retirements. The McGraw-Hill Companies Inc. All rights reserved.