As an alternative to separation, an increasing number of companies are offering redeployment opportunities—matching employees with as many open internal positions as possible. (Photo: Shutterstock)
More employers are beginning to realize that an “employee-first” culture actually results in better bottom-line performance—and such a culture includes providing even more for workers when they leave, according to RiseSmart's 2019 Guide to Severance & Workforce Transition.
“This 'employee-first' trend is the result of a growing realization that a company's most valuable resource is not its products or services, but its employees,” the authors write. “A mindset shift among employers is taking place as people are seen not as a cost center, but as an organization's most valuable assets. As such, companies are now investing in their employees at every stage of the employment journey, even upon exit from the company.”
RiseSmart surveyed survey of 1,500 HR professionals around the world, and found that 44 percent of all companies that responded now offer some form of severance benefits to all employees, not just senior managers—a 6 percent rise from 2017.
“While we have seen an increase in the number of employers offering severance to all employees, there's still room for improvement,” the authors write. “Looking at companies with between 7,500 and 20,000 employees, half offer severance to all staff, but the other half do not. Those with over 20,000 employees offer severance to everyone only a third of the time.”
Among employers that have a formal, written severance policy, 50 percent now offer outplacement to their employees as part of those predetermined packages, up from 2017, according to the survey. Other specific benefits offered to employees upon separation include retirement benefits, the payout of bonuses and commissions, life insurance, and retirement planning services.
As an alternative to separation, an increasing number of companies are offering redeployment opportunities—matching employees with as many open internal positions as possible. This year 60 percent of the respondents offer such programs, up 14 percentage points from two years ago.
“That's more good news and not all that surprising given the historically low levels of unemployment in the past few years and the scarcity of qualified candidates in the open job market, ” the authors write.
Other key survey findings include:
- 48 percent of HR leaders cite company culture and the need to take care of employees as top reasons for offering severance to displaced workers.
- About a third of all companies offer between one and three months of severance and a fifth of all companies offer between three and six months.
- 63 percent of companies who offer outplacement also provide it to non-exempt employees.
- Just under 70 percent of companies monitor employer sites like Glassdoor and Indeed to assess the comments of separated employees.
- 38 percent of employers see an increase in negative reviews on social media following a layoff.
“That's why more companies are taking the employee/employer relationship seriously even after the relationship officially ends — and certainly while it's winding down,” the authors write. “It's also why outplacement has become such an important element and a more commonplace offering.”
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Katie Kuehner-Hebert
Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.
