Many employers plan to let employees go in 2006, but some appear to be giving little thought to severance pay.[@@]
Researchers with WorldatWork, Scottsdale, Ariz., a nonprofit benefits group, and Aon Corp., Chicago, have published data supporting that conclusion in a report on a survey of 500 large U.S. employers.
About 28% of the employers already expect to lay employees off in 2006, and 26% are not sure whether reductions in force will be necessary, the researchers write.
Despite the large number of employers planning layoff, 30% of the employers have no formal severance plan in place, and 63% of employers have not reviewed their severance plans in at least 12 months.
About 12% of the employers have never reviewed their severance plans, the researchers write.
At employers that offer severance pay, 85% use the number of years served as the basis for determining the amount of severance provided.
About 32% of the employers surveyed pay 1 week’s salary in severance benefits per year of service, and about 23% pay 2 weeks of pay for every year served.