U.S. Employers Offer Less Severance Pay
December 2, 2008 (PLANSPONSOR.com) - A new global
study has found that employees laid off in the United States
earn the least amount of severance pay worldwide-no matter
what level of employee or amount of tenure with the
organization.
A Right Management news release about its severance
pay study found
US-based employees consistently earn less severance
per year of service than colleagues around the
world.
Top executives earned as little as 2.76 weeks of
severance per year of service, compared to a worldwide
mean of 3.39 weeks per year of service, according to the
survey. The disparity increases as the level of employee
decreases.
The news release said US employers are also more
likely (68%) to enforce a cap on severance payments than
the rest of the world (56%).
Ninety-six percent of separated employees in the US
are required to sign a waiver before they can access
severance benefits, which Right Management said
"reflect(s) the litigious culture of this country."
Unlike in other regions, 61% of companies in the US tend
to offer severance right away with no minimum tenure
required, compared to 42% doing so in the rest of the
world.
"Severance can be used as a strategic tool to
differentiate an organization in the tough war for talent
and should be directly aligned with a company's business
strategy and brand value," said Right Management
President and COO, Douglas Matthews, in the news release.
"Severance benefits should be consistent with the values
and culture an organization espouses."
According to Right Management, the mean weeks of
severance for those in the U.S. who were voluntarily
separated included:
-
Top executives, 2.76
-
Senior Executives, 2.23
-
Department Heads/Managers, 1.55
-
Professional/Technical, 1.39
-
All other employees, 1.23
The global study across 28 countries drew from more
than 1,500 responses from human resource professionals
and senior managers responsible for making severance
decisions in their organization, including 456 from the
United States.
Right Management engaged International
Communications Research to conduct the study between July
and September 2008. Of the 1,524 survey responses
received, 45% were from the Americas, 34% were from
Europe, and 21% were from Asia Pacific.
More information is available
here
.
Fred Schneyer
editors@plansponsor.com