WorldatWork Survey Finds Mass Layoffs at Lowest Levels Since 2003
Planned mass layoffs are at a record low, according to a survey released by WorldatWork. The Severance and Change-in-Control Plans survey revealed that mass layoffs are at their lowest level since the start of the survey in 2003, after a spike in 2009. In 2014, 43 percent of participating organizations said they did not anticipate a reduction in force in the next 12 months.
Key findings from the report:
- 38 percent and 30 percent of respondents have reviewed their severance or change-in-control policies, respectively, within the past 12 months.
- The most common minimum amount of cash compensation an employee might receive in severance is two weeks’ salary, cited by 32 percent of respondents, followed by one month s salary at 20 percent.
- The most common maximum amount of cash compensation an employee might receive in severance is one year’s salary (30 percent). A maximum of 26 weeks’ salary is at an all-time low of 16 percent.
- The most frequently used factors in calculating severance benefits continue to be years of service, position, pay, or employment agreement.
- The most prevalent consideration for the amount of severance benefit received is years of service, relied on, at least in part, by 92 percent of participating organizations.
- The percentage of participating organizations subsidizing some portion of COBRA coverage in their severance plans has continued to edge upward. In 2014, 37 percent reported that they do not subsidize COBRA coverage, compared to 43 percent in 2011.