GlobeIn Severance Practices Around the World, ManpowerGroup’s Right Management has recommended employers reassess severance practices in order to better attract, retain, and transition talent. The study includes input from over 1,800 senior executives and HR pros from 19 countries and 19 industries and sets benchmarks for termination and severance practices specific to country, region, industry, and size of company.

“The increasing importance of talent to an organization’s success has created a new focus on how severance practices, as part of a broader workforce strategy, can impact a company’s brand value,” said Bram Lowsky, Right Management’s Group Executive Vice President and Global Head of Career Management. “The need to continually realign and right-size talent persists in today’s uncertain economic environment, and companies that have competitive severance practices in place are ahead when it comes to future retention and recruitment efforts and engagement of remaining employees after a restructuring.”

Practices vary by country and industry with approximately 75 percent of companies having a formal, written severance pay benefits policy in place. Asia Pacific companies were found to be more likely (82 percent) to have formal policies compared to companies in the Americas (73 percent) and in Europe (72 percent).

Key findings from the survey include:

• Severance and termination policies are typically a combination of company policy and regional law (52 percent).

• Most companies (62 percent) are legally required to give terminated employees advance notice.

• Top executives receive the most severance per year, regardless of the status of separation with an average of 3.5 weeks per year whether voluntarily or involuntarily separation.

• Severance is usually offered as a lump sum.

• Most companies (68 percent) offer outplacement services.

• Most employers (60 percent) offer outplacement instead of monetary benefits.


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