Friday, August 23, 2013

Rehiring him cheaper than severance?

As someone who has, on a few occasions, had the experience of collecting severance pay because my employer saw me as a threat to their profitability, I must confess to finding the whole situation surrounding Alex Clifford to be quite hilarious.

How much more will this ride cost because of the cost of Alex Clifford's severance package?
Clifford is the former chief executive officer of the Metra commuter railroad that takes people from the suburbs into downtown Chicago. He was let go from his post, and he was given a severance package to get him out the door that went far beyond the one week’s pay for every year served with the company.

DEPENDING ON WHO one wants to trust, the total of Clifford’s severance package totals somewhere between $750,000 and $900,000.

That has Metra officials complaining, particularly since it seems that under slightly different circumstances, they could have used an insurance policy they have to actually cover the cost of the severance – rather than having to pay the cost out of their actual budget.

Clifford, of course, is being his “courteous” self (heavy sarcasm intended) in saying that he’d be more than willing to forgo his severance.

Just give him his job back!

I DON’T KNOW how sincere Clifford’s attorneys were when they made that offer earlier this week. For purposes of this commentary, I’ll presume that there are conditions under which Clifford would actually return to an entity that was eager to remove him previously.

Then again, I’d probably return to most of my former employers if the money they offered was decent enough – ie., a pay raise of sufficient size to help assuage my ego for the blows it suffered by being cut loose.

Yes, that’s sarcasm too.

But it is why I find humor in the idea that Clifford’s legal representation would make such an offer.

I SUSPECT THAT Metra officials privately are wretching at the very thought of having to pay Clifford anything more. They desperately wish that negotiations they had with Clifford back when he was let go as CEO had been more hard-lined and that they could have gotten away with making a significantly-less payment to get him to leave without incident.

Which is why the laid-off employee in me thinks it only appropriate that this particular dismissal will wind up costing Metra a significant amount of money.

After all, the premise behind a lay off is supposed to be that it will be cheaper to just throw a few weeks’ salary at someone for work not done, in exchange for not having to keep them on the payroll at salary and insurance benefits.

In the long run, it should cut costs. But as we see from this case, it doesn’t always do that.

THERE’S ALSO THE “plus” that this incident may better educate the public as to the ways of corporate actions.

Because while the idea of a few week’s pay as severance to tide us over until we quickly (in theory) find a new job is customary to you and me, to the corporate world, these larger severance payments are customary.

It seems the executives of the world think they’re supposed to make a profit out of being dismissed from a job. Because the kinds of contacts they make in their work aren’t enough to help them find new employment, they want sizable payments.

Although a payment that could be close to $1 million seems extreme – even by corporate standards.

THERE’S JUST ONE potential drawback to this whole mess – the fact that Metra isn’t really a corporate entity, but one that provides a public service.

Which means there’s a very good chance that the cost of this severance could wind up causing a future hike in our fares. As if I’m not paying enough on those occasions I use the trains on Metra’s Electric or Rock Island lines.



Anonymous said...

What is the 'cost of doing business'?
The lowest fair would be possible with slave labor?
Then society would be divided into tow classes: Lords and Serfs
or Masters and Slaves.

Anonymous said...

censorship eh?