On the other hand, that’s better than a year ago when half the respondents to Buck Consultants’ Severance/Retention Survey said they had downsized.
Durable goods manufacturers are more likely than other companies to have downsized in the last 12 months; more than 60% of survey participants did so, according to Buck. However, just one in five of these companies anticipate further layoffs in the next year.
At the same time as downsizing is becoming less prevalent, so is the protection afforded to executives by employment agreements. In last year’s survey, nearly two-thirds (62%) of the responding companies offered their executives contracts that spelled out various terms of their employment, including severance arrangements.
This year, that number dropped substantially – to 46%.
Further, the severance terms offered to executives are shrinking. For example, companies are reducing the maximum period over which severance is paid.
Last year’s survey showed the 75 percentile for severance duration was about two years, but this year the 75 percentile is one year.
The survey was conducted among 81 organizations in March 2002. These companies represented all parts of the country, a cross-section of industries and a wide range of revenues and employee populations.