Severance practices vary from one country to another, but there are commonalities such as the need for advance notification and the provision of outplacement services upon termination.
This is according to a study by RightManagement, called Severance Practices Around The World.
Three out of four companies surveyed say their organization had a formal, written severance benefits policy. The study also reveals that across all regions, severance and termination policies are frequently governed by a combination of company policy and local/national law (52%).
Additionally, the report finds that in the event of an employee termination, 62% of companies are required by law to give a certain amount of advance notification to the employee.
More than half of the companies surveyed put a cap on severance calculations. And regardless of position or type of separation, severance is most often offered as a lump sum payment.
Yet another finding of the report is that although not legally required, most companies (68%) provide outplacement services. A majority of employers (60%) reported that they offer outplacement instead of monetary benefits. Only 35% of employers offer cash in lieu of outplacement.
“Regardless of location and industry, we’re seeing an evolving and strengthening connection between competitive severance practices and favorable brand image in the marketplace,” says Bram Lowsky, Right Management’s group executive vice-president and global head of career management. “Organizations that provide outplacement support and demonstrate fairness, care and respect for those leaving not only ensure a positive restructuring outcome, but also realize an improved brand value that ultimately attracts new and retains current employees.”
The survey includes input from more than 1,800 senior executives and HR professionals from 19 countries.