Vanguard adds severance, family benefits
Vanguard Group, which for most of its 41-year history maintained a no-layoffs policy, has started to offer severance payments for "qualifying separations," alongside other new staff benefits.
The company, whose 14,000 "crew members" manage nearly $4 trillion in investor assets from its Malvern headquarters and smaller offices in Phoenix and Charlotte, N.C., has begun offering a week's pay for every year of service to people who fail to find new Vanguard jobs when they lose existing positions, provided they agree not to sue the company or talk about it, veteran staffers tell me.
"We actually announced several benefit enhancements" back in September, spokeswoman Arianna Stefanoni Sherlock says.
"It is vitally important that we continue to support [crew members] at every life stage they experience during the time they work at Vanguard," says CEO Bill McNabb, in a statement describing the new benefits.
Those include "new paid parental leave; new paid family-leave care; enhanced bereavement time; new surrogacy assistance; enhanced retirement medical benefit; new student-loan repayment program; enhanced dependent scholarship; enhanced academic assistance; and the severance program," Stefanoni Sherlock confirms.
The pro-parent policies recall an earlier era. When it employed crowds of college-educated customer-service workers in the 1980s and '90s, Vanguard, like area insurers and credit-card call centers, enjoyed a reputation as a place where suburban moms could set relatively flexible hours.
But Working Mother magazine dropped Vanguard from its list of "100 Best" employers after 2001, around the time the company cut back its use of part-timers, as Vanguard's increased use of technology slowed overall hiring and cut back on the need for phone service.
A formal severance-pay policy recognizes that a company will sometimes put people out of a job. The notion that Vanguard didn't institute layoffs made it attractive for job applicants seeking stability in the sometimes-volatile financial jobs market. But it also raised questions in the minds of some veteran workers, who thought that bosses trumped up reasons to dismiss them as staffing needs changed.
Since the early 2000s, my Inquirer colleagues and I have heard from dozens of Vanguard employees who say they thought that they, their colleagues or even their subordinates were unfairly fired "for cause." Some who felt unfairly dismissed sued, as my colleague Erin Arvedlund has reported. Lawsuits that aren't thrown out are often settled confidentially.
The sweetened benefits package also follows changes to Vanguard promotion and bonus practices in previous years that lower-level employees feared could reduce their total cash compensation.
At a time of rapid growth in its managed assets, as the company hires thousands a year to upgrade sales and service and replace those leaving, Vanguard, like other suburban Philadelphia employers, has lately found itself at a disadvantage competing to hire recent graduates, who often prefer Center City employers so they don't have to buy cars and can hit the bars faster at the end of the workday.
The company has also been scouting office leasing locations in the city, more than a decade after closing its former Philadelphia retail office.
Some highlights of Vanguard's expanded staff benefits:
-- "New parents will now be eligible for six weeks of fully paid time off, and mothers giving birth will be eligible for up to 16 weeks with an increased disability benefit."
-- Adoption and surrogate-motherhood assistance. Parents "can each take the time off in increments." Vanguard calls this "best-in-class parental leave."
-- Matching the big accounting firms in giving recent college graduates $100 a month to help pay back tuition loans, for up to six years.
-- "A new family care leave policy will give crew two full weeks of fully paid leave per year to care for ill family members." Bereavement leave has been increased, to five days "and the flexibility they need."
-- "Retiring crew can now take fully paid COBRA health-care benefits that fully extend their current medical care elections through three months of retirement."
These are "better options that [crew members] told us they need to achieve healthy work-life integration," Kathy Gubanich, managing director for human services, says in a statement. She called Vanguard benefits "compelling and competitive."