The nature of severance packages varies between industries and regions, according to a recent report.
A benchmark survey of almost 3,700 U.S. employers revealed that 60.5 percent had a severance policy in 2011, The Society for Human Resource Management reports. About 62.4 percent of healthcare companies had a post-employment plan, and 71.2 percent of insurance providers did as well. Rates were lower among services employers and non-profit organizations, with only 58.5 and 45.6 percent, respectively, saying they had a plan.
"Employees at many organizations are under a great deal of stress, dealing with increased workloads due to staffing deficiencies coupled with the fear of another economic downturn," said marketing executive Amy Kaminski. "Employers can help alleviate a little of that angst by implementing a clear set of post-employment practices, providing employees with an added sense of security in the event they are separated from their job."
About 43 percent of companies based severance on an employee's years of service, while another 35 percent used years of service in combination with other factors. About 15 percent determined severance at the employer's discretion. These numbers varied regionally, with 18.9 percent of Midwest companies and only 10.2 percent of Southeast companies using employer discretion to set severance.
According to SHRM, post-employment practices are an important part of a company's HR management system.
