Fewer Organizations Implementing Hard Minimums/Maximums on Severance Packages


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A new survey confirms there are major changes afoot in severance and separation benefits that will dramatically impact employer brand and talent management.Severance

Lee Hecht Harrison (LHH), a talent development and transition company, and Compensation Resources, Inc., a consulting firm specializing in the design and implementation of organization-wide compensation programs, surveyed 350 senior Human Resources executives and leaders who are responsible for helping their organizations manage talent. The main topics explored in the study include severance, outplacement, redeployment, stay bonuses, and early retirement programs.

Among the major findings in the 2017-2018 Severance & Separation Benefits Study is that severance remains the method-of-choice for organizations concerned with protecting employer brand: almost all businesses (97%) in the study said they offer some form of severance.

However, the study found only 55% have formal, written severance policies. That is a decline from the 2011 survey results, when 65% had formal severance policies.

The survey of Human Resources managers also revealed that fewer businesses are setting firm minimum and maximum severance amounts. In 2011, more than 70% of businesses had written policies on minimum and maximum severance; by 2017, it dropped to just over half (52%).

Notwithstanding these trends, the message from Human Resources professionals was clear: Severance and

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