Severance Alive and Well Despite Downturn
April 14, 2009 (PLANSPONSOR.COM) - Employers
grappling with the pressures of the economic downturn are
nontheless paying stepped-up attention to outplacement and
severance for departing employees.
That was a key takeaway from a new survey by human
resources consulting firm Lee Hecht Harrison (LHH) in
Woodcliff Lake, New Jersey.
"There is a strong correlation between how a
company treats departing employees and its ability to
attract and retain top talent now and in the future,
particularly when the economy rebounds," Barbara Barra,
executive vice president of operations for LHH, said in a
statement. "Providing a socially responsible and
compassionate career transition service is more than the
right thing to do, it's the smart thing to do."
According to the survey 65% of companies have
stayed with their severance policies, and 19% have even
made them "more generous," the report said
Reasons Cited
Among the surveyed HR executives, 69% said avoiding
litigation is the top driver of their company severance
policies - consider that in 2008 93% of surveyed
employers required employees to sign releases in exchange
for severance, compared with just 76% in 2001.
Otherr reasons cited included 43% who wanted to
remain "employers of choice", and 25% who said their top
motivator in the area of severance policies was keeping
former employees as future customers.
In addition, more employers are offering
outplacement assistance as a solution to preserve their
employer brand and reputation, according to LHH. In 2001,
53% of companies offered outplacement services to all
officers and all senior executives, compared with 67% in
the latest report.
The study was based on responses from 1,072 human
resources executives.
Fred Schneyer
editors@plansponsor.com