Understanding VRS vs. CRS: Can Someone Explain the Key Differences?

Dear all,

Please clarify the difference between VRS and CRS.

Thank you.

Hi,

Please provide some information about VRS such as the age of eligibility for VRS, the procedure involved, and the roles of both the company and the employee in it.

Regards,
Ritu

Hello, Boopy. Nice to see you on CiteHR. I work in a Maxi industry focusing on Corporate Social Responsibility (CSR). I believe you have heard about CSR and are familiar with its principles.

Regards,
Sunil S. Mudgal
09766082061

Hi Boopy,

You could see the difference in the expansion itself.

VRS (Voluntary Retirement Services) is done by the willingness of the employee.

CRS (Compulsory Retirement Service) is done in compulsion by the management or government without the unwillingness of the employee.

Hope this helps.

Thanks,
Thiru R

VRS: Voluntary Retirement Scheme (employee willingly parts with service)
CRS: Compulsory Retirement Scheme (Employer creates a situation where the employee has to leave without his willingness)

It happens in certain organizations to get rid of aged, non-performers, absentees, etc.

B. Dakshinamurty

Yes,

VRS stands for Voluntary Retirement Scheme; CRS is the Compulsory Retirement Scheme.

VRS - The company offers a scheme by which surplus manpower is reduced. It involves a lucrative economic package offered to those who opt to leave. It is beneficial to an employee since they receive a large sum of money in a single stroke, which they can invest and earn recurring interest month after month. Moreover, if the employee is truly valuable, they can find placement in a similar or different industry for a reasonably good salary, providing additional income.

As far as the employer is concerned, the position reduced by VRS will not be replaced. So, although there is a heavy cash outflow cost to the exchequer today, over time, the company achieves break-even and eliminates the need for a permanent worker in that role, thus saving on employee costs.

On the other hand, CRS is a tool used to remove dead weight and unproductive employees seen as liabilities to the company. There is no option for the employee; they are compelled to retire. If they refuse, there are plenty of reasons that can force them to leave. Therefore, these employees usually have no choice but to opt for it.

V. Balaji