Three surveys conducted in 1998, 2001 and 2005 document that severance pay ballooned around the turn of the century but has since retreated somewhat.
Woodcliff Lake, N.J.-based Lee Hecht Harrison released the survey results this month in a report titled "Severance and Separation Benefits: Benchmarks for Evaluating Your Policies."
The company specializes in career and leadership consulting.
The report, based on a survey of 1,030 human resources executives, states that companies are less generous with severance this year than they were in 2001, but still more generous than 1998:
- 54% give two weeks or more pay per year of service to senior executives; down from 57% in 2001. (Percentage not available for 1998.)
- 51% give the same amount to mid-level executives; down from 55% in 2001, but up from 37% in 1998.
- 38% give the same amount to managers and functional staff; down from 40% in 2001, but up from 29% in 1998.
- 33% give the same amount to administrative and support staff; up from 29% in 2001 and 23% in 1998.
More companies that ever over the three survey years reported giving less than one week pay per year served.
According to Lee Hecht Harrison Executive Vice President Bernadette Kenny, the survey found that only 33% of respondents changed their severance policies in the past three years, and for those, 52% said that they had actually become more generous. Kenny suspects, however, that the 48% that made their policies less generous made more dramatic changes than those that made them more generous, thus accounting for the slight decline in benefits overall.
