I recently found myself called on to give advice on this topic, and I didn’t find anything very convincing on the Internet, so here is my attempt.
What is the alternative?
Clearly this is the main question, and it comes in two parts.
If you leave, what are you going to do? If it’s another job, how long will it take to find and what will the pay, conditions, location, work be like compared to the present job?
If you stay, what will happen? Might you end up in compulsory redundancy, with probably less compensation but with extra earnings in the interim? How long can you drag it out for by way of appeals and legal challenges? Might the management plan work and you end up with your job being better paid and more interesting?
Some special cases
If you really like your job or you really need the pay and you don’t think you would get the same elsewhere, then hanging on looks like the right answer.
If you are sure that you are marketable–would get the same or better elsewhere–then there’s no point in refusing free money and the chance of an extended holiday.
If it’s making you ill, you should go.
If you’ve started relatively recently, then while you won’t get much money there is an argument that the organisation may not have a great future and if they are offering you money to escape you should take it.
If you are nearing retirement, it may just be a case of doing the same thing a year or two early and it may not matter that much one way or the other.
If there’s something else you’ve been dreaming of doing, then that should be your lead option–look whether you can do it now (after VR) and if you can’t, then see how you can make it possible.
The main case
The main case would be where you’ve been there some time, you can’t afford not to work, you could reasonably expect to find another job and you feel some dissatisfaction in your current job.
OK. The first thing to say is that there are probably things about the present job that are good but that you won’t notice until they’ve gone. The second is that other things being equal if you find another job that is broadly the same then the total reward (pay, pension etc) is likely to be less because they aren’t going to pay one-for-one for experience and skills gained in another setting; they’re simply not as valuable.
So we may be left with a decision tree something like the following.
A decision tree
In principle, you need to estimate the probabilities and utilities of the different outcomes and make a decision that way. But the main use of such a diagram is often in forcing you to think explicitly about the alternatives and outcomes.
You can for instance think of the worst outcomes and whether you can live with them:
If I don’t take it and they make me redundant later anyway…
If I do take it and I don’t find a suitable alternative [for a long time]…
Or it may be useful to try to find a question that will settle it:
Can I turn down the offer of money to escape from this place?
Can I voluntarily give up a guaranteed income?
If you are lucky, you will be able to come up with a question that is more convincing than the others.
Some pieces of advice
Make sure you take some advice!
The tax treatment of redundancy payments and added pension is not easy to understand–best to get someone (Trade Union, IFA, accountant…) to work it through for you…
Be wary of a permanent solution to a temporary problem
If you feel you have reached the end of the line, try writing down what would make you stay and presenting it to the management–if there’s nothing you can think of that you can share with the outside world, it may be that the problem is not with the job/management but…somewhere else…
The choice is not between ‘the present situation’ and ‘change’ but between ‘the present situation’ and ‘your best guess of the alternative’. You need a concrete alternative for comparison, otherwise you will end up trying to compare the present with some mush made out of ‘all the good/bad [according to temperament] things that could happen’–and even the minority that are not mutually exclusive are not all going to happen.
Remember that while pay is visible enough, conditions may not be–in particular, pension schemes have worsened over the years and may not be what you expect in a new job.