Study: More employers offering severance packages for longer time periods
- RiseSmart, a career transition service, released a guide showing that more companies are giving severance pay for longer time periods. The 2017 Guide to Severance and Workforce Transition surveyed U.S. employers with at least 500 workers.
- The study found that while 90% of organizations provide severance, only 38% offer the benefit to all workers. It also found that the number one reason organizations offer severance is because they’re "employee-oriented employers."
- "Employers of choice realize that the employee experience doesn’t end when workers walk out the door," said Sanjay Sathé, RiseSmart president and CEO. The Guide’s purpose is to help organizations to adopt severance policies that are comprehensive and competitive.
Severance packages provide laid-off and otherwise displaced workers with temporary economic safety nets. Severance can include extended health coverage, which can be a generous benefit for outgoing employees.
According to the guide’s survey, an overwhelming majority of organizations offer severance, but not to all workers. Employers often offer premium benefits only to the most highly compensated workers. Since lower-paid workers are likely to struggle the most in between jobs, employers that offer their lowest wage-earners severance likely would forward their "employee first" values.
Several organizations are experimenting with programs to extend more generous benefits to hourly or part-time workers to improve retention.