Global & US Severance Pay Benchmarks Released

A global study of severance pay practices (covering 28 countries and 1,500 respondents, 456 of which were from the U.S.) has been released by Right Management.

I am sharing high level findings here, in response to the fact that I am getting a lot of calls and emails from people looking for benchmark data on severance practices.

The study notes that U.S. employees earn the least amount of severance pay worldwide, regardless of their level or tenure with the organization.  Something to keep in mind if you are involved in or overseeing reductions on a global scale.

From the study:

Mean Weeks of Severance Per Year of Service:

	United States	Worldwide
Voluntarily Separated:
Top Executives	2.76	3.39
Senior Executives	2.23	3.29
Department Heads/Managers	1.55	3.00
Professional/Technical	1.39	2.79
All other employees	1.23	2.65

Involuntarily Separated:
Top Executives	3.04	3.52
Senior Executives	2.49	3.33
Department Heads/Managers	1.78	2.93
Professional/Technical	1.60	2.75
All other employees	1.44	2.59

The Right Management data is consistent with the results of a WorldatWorksurvey on severance and change-in-control practices released in 2007 (featuring the responses of 523 WorldatWork members, presumably all or mostly U.S. based) which found that the most prevalent formula for calculating cash severance was one week of salary per year of service (31%), followed by two weeks of salary per year of service (20%).

Comments

[Michael Moore]

Ann

Great information. Thought I might mention one caveat on the international benchmark information. Severance pay is mandated by some governments outside the United States including Canada and many European countries. The amount of mandated severance varies depending sometimes on age, years of service and the reason for separation. Also missing from the analysis might be unemployment benefits received by US employees. As usual, it is not an "apples-to-apples" comparison

[Ann Bares]

Mike:

Thanks for checking in and sharing this - helps us put the severance data into context.