The government has failed to frame a long-term employment policy, without which there is a danger of disrupting and pressuring the path of development strategies. The employment otherwise would be for a few well-connected individuals.
According to a recent report prepared by the Ministry of Labour and Human Resources the unemployment the youth unemployment rate has increased to 10.7 percent from 9.4 percent in 2014 (BBS, May 26 2016: Youth unemployment rate increases)
This year almost half of the 3,536 university graduates appeared the preliminary examination for 498 vacancies in the civil service. This means at least six graduates will be vying for a slot in the civil service this year. The unemployment figure is rising.
The government must now think of absorbing graduates. One of the best ways of giving jobs is to replace old servants with that of new seekers. The labour force participation rate is estimated at 62.6 percent in 2014, (those between 16-45) and they are considered economically active group than who are economically inactive due to old age.
One of the techniques of making the workforce is Voluntary Retirement Scheme. This is a generous - can be tax-free severance payment to persuade the employees to voluntarily retire from the service, which is called as ‘Golden hand Shake’ as it is the golden route to retrenchment. It can be a better ways of creating jobs for active group of people.
A golden handshake is essentially a severance or kind of compensation made to employee through several ways, such as cash, or stock options, or other incentive packages. It’s an agreement between an employee and employer when they leave jobs or retire voluntary; the credit as a retirement incentive is given with their pension, gratuity or any other benefits. A golden parachute agreement customarily is used as a lure to create jobs and give opportunity to jobs to people in the country. As young people enter jobs, they tend to perform better than old oldies.
Some benefits under this scheme could be better emoluments; the employee will get the provident fund and gratuity dues at the earlier year so that he/she can use for house construction, and for family subsistence. It is a lucrative settlement which prevents resentment at the old age. It also offers best and human route to retrenching excess of employee. Sometimes, voluntary nature preludes the need for enforcement.
The people most likely to take advantage of the Golden Handshake(GH) are people who would retire anyway. For example, employees who are more than 50 years old and have more than 25 years of service should be eligible for GH. If this tenure has to be taken in, 500 or more jobs could be created in a year than a meager number of 434. Offering the GH might encourage a few additional employees to retire sooner. And those bogus employees opt retirement, and for the benefit anyway, and then the new experiencers would result in a higher quality work.
As an alternative to the Golden Handshake, there could be Lump Sum Incentive program in which retirement-eligible employees were offered a lump sum incentive. These can include cash, a house, or stocks options, or other packages for life-long for personal sacrifice of early retirement. For example, an employee at least 50 years old who retires by the close of the fiscal year is offered the opportunity to receive lump sum incentives.
A golden handshake not only creates jobs for our energetic youth, but also provides early benefits to the senior citizens of the country.