Consider taking redundancy based on the package value, your job prospects, or if the company's future is uncertain. Stay and job search if you need income security and the redundancy package is minimal.
Should you take redundancy or look for a new job?
The decision depends on your financial position, the redundancy package value, job market conditions in your field, and your company's stability. Redundancy can provide breathing space to find the right role, while staying employed offers income security during your job search. Evaluate both the immediate financial impact and long-term career implications.
When does taking redundancy make sense?
Redundancy becomes attractive when the package significantly exceeds minimum statutory requirements, giving you genuine financial runway. Consider accepting if your industry has strong hiring demand, you've been considering a career change anyway, or workplace restructures signal ongoing instability.
Source: Employment New Zealand
What are the risks of staying during restructures?
Remaining during organisational upheaval can mean increased workloads, reduced resources, potential future redundancy rounds with smaller packages, and limited internal advancement opportunities. However, staying demonstrates commitment and may lead to promotion opportunities as others leave.
How to evaluate your redundancy package
Compare your offer against these factors:
- Statutory minimum versus actual offer amount
- Notice period payment and accumulated leave payouts
- Career transition support or outplacement services
- Health insurance continuation periods
- Restraint of trade clause implications
- Tax implications of lump sum payments
- Your current savings and monthly expenses
- Realistic job search timeline in your field
What if you're offered voluntary redundancy?
Voluntary redundancy gives you control over timing and often comes with enhanced packages compared to compulsory redundancy. You can negotiate terms, plan your transition, and leave on positive terms that preserve professional relationships and references.
Frequently asked questions
Can I negotiate my redundancy package?
Yes, redundancy packages above statutory minimums are often negotiable. Consider requesting enhanced payouts, extended notice periods, career transition support, or positive reference agreements as part of your package.
Should I start job searching before accepting redundancy?
Yes, begin networking and exploring opportunities while still employed. This gives you market intelligence about hiring demand and realistic timelines, informing your redundancy decision with concrete data.
What happens to my employment benefits during redundancy?
Most benefits cease when your employment ends, though some employers extend health insurance or provide career transition services. Clarify continuation arrangements before accepting your package.
Is redundancy better than resigning?
Redundancy typically provides better financial outcomes through packages and potential unemployment benefits, while resignation offers no safety net. Redundancy also carries no negative career implications since it's business-driven, not performance-related.
How long should I take to decide on redundancy?
Employers usually provide time to consider offers. Use this time to calculate finances, explore job market conditions, and seek advice from career counsellors or financial advisors.
Get clarity on your career decision with our Should I Stay or Go? tool - analyse your situation objectively before making this important choice.