Severance Practices Around the World


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Our robust global study of severance practices includes data from 19 countries and 19 industries with input from over 1,800 professionals.

In the Human Age, it takes talent for organizations to succeed. Operating in a volatile global economy means frequent challenges to realign talent. Companies need to be prepared for the possibility of change by putting competitive severance practices in place. Taking care of departing employees affects future retention and recruitment efforts as well as engagement and productivity of remaining employees.

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  • Severance Practices Around the World

    2. 2. HOW IS SEVERANCE DETERMINED? 52% By company policy 25% 23% By national or local law Combination of company policy & national/local law
    3. 3. 3 out of 4 companies have a formal, written severance benefits policy
    4. 4. DID YOU KNOW… 66% 55% 19% of companies require separated employees to sign a waiver to access benefits. of employers enforce a cap on severance payments. of companies offer severance with no minimum tenure required.
    5. 5. WHAT SEVERANCE DO TOP EXECUTIVES EARN? Weeks per year of service when involuntarily separated.
    6. 6. Taking into account how severance practices vary by country is essential for any effective global workforce strategy.
    7. 7. Most common benefits Department Heads, Managers & Supervisors - Involuntarily Separated Outplacement Assistance Health Related Benefits Monetary Benefits Company Resources Global 69% 40% 23% 8% Americas 71% 56% 20% 6% Europe Asia Pacific 65% 29% 20% 9% 72% 39% 31% 9%
    8. 8. Severance is a complex and sensitive responsibility. It is essential employers get it right as it can have a dramatic impact not only on the engagement of employees who remain but also on those who might be considering employment with the company in the future.
    9. 9. 68 % of companies globally provide outplacement where it is not legally required.
    10. 10. DOES YOUR COMPANY OFFER MONEY INSTEAD OF OUTPLACEMENT? Most employers offer outplacement before monetary incentives. Global Public Corporation Public Sector Government Agency Private Corporation Not For Profit 59% 53% 61% 71% 36% 40% 35% 23%
    11. 11. SEPARATED EMPLOYEES WHO SELECT A MONETARY OPTION OFTEN DON’T REALIZE long it takes to land another job. ...they may need to acquire additional training / learn new skills. ...what is required for a successful career transition. ...the tax implications of a monetary payout.
    12. 12. 75 % of organizations use retention bonuses to hold on to top executives during change. ½ are negotiated case by case. ⅓ ⅕ calculate bonuses based on years of service. calculate bonuses based on performance. 5.36 months (on average) added to their salary
    13. 13. LOOKING AHEAD: 1 in 2 organizations report severance benefits have stayed the same in the past 3 years. 1 in 4 3 in 5 plan to change their severance plan within the next 12 months. plan to increase benefits/pay.
    14. 14. Right Management is the talent and career management expert within ManpowerGroup. As the world’s leading outplacement provider, Right Management’s success is built on 30 years’ unequaled global and local experience, our ability to tap into ManpowerGroup’s unparalleled knowledge of workforces, and our $2 million annual investment in proprietary research. This drives our continuous improvement and ongoing innovation to stay on top of trends, assess market shifts and fuel our leading edge solutions as we help our clients and their former employees to be successful in today’s competitive environment. About the study Right Management’s latest study spans data from 19 countries and input from more than 1,800 senior business leaders and human resource professionals. Whether responsible for managing a workforce in one country or many, this data will help you compare your own practices with broad-based norms to ensure you are providing equitable packages to those who need to leave your employ.
    15. 15. Use this research to: • Benchmark employee termination and severance practices • Understand the role of outplacement. • Compare your practices with broad-based norms. Contact your local Right Management office to request a copy of the research DOWNLOAD