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According to Survey by Manchester Inc.: Cash Severance Payments Decline; But Other Benefits Are Enhanced.

Business Editors

JACKSONVILLE, Fla.--(BUSINESS WIRE)--July 10, 2001

Cash severance payments to employees terminated in 2001 have declined by up to 20% from severance packages awarded in 1997, according to a survey by Manchester Inc., the career management consulting unit of Modis Professional Services, Inc. (NYSE:MPS).

The average maximum severance payment for non-exempt employees (front-line employees) declined 20% in 2001, to an average maximum of 24 weeks from 30 weeks in 1997. (The average maximum severance payment is the average of the maximum severance payments of all participating companies that have maximum severance policies.)

The average maximum severance payment for middle managers declined 15% in 2001, to an average maximum of 28 weeks from 33 weeks in 1997.

The average maximum severance payment for senior-level executives in 2001 declined 12% from 1997, to an average maximum of 37 weeks of severance pay, from an average maximum of 42 weeks of severance in 1997.

However, companies have enhanced certain other severance benefits. More organizations are providing outplacement assistance, health insurance, and access to Employee Assistance Programs to employees in 2001 than in 1997. In addition, more organizations (74%) now allow employees to keep the full amount of their severance regardless of how quickly they find other jobs, up from 72% in 1997.

The survey included responses from 178 organizations nationwide. Among highlights of the survey:
-- Health insurance (in addition to COBRA) is the most popular severance
benefit organizations are providing to employees: senior-level executives (80%
of organizations), middle managers (75%), and front-line employees (76%).

-- Outplacement assistance is the second most popular severance benefit
organizations are providing to employees: senior-level executives (77%), middle
managers (70%), and front-line employees (55%).

-- The pharmaceutical/biotechnology industry granted the most generous
severance benefits to employees in 2001, displacing the chemical industry,
which had awarded the most generous severance benefits in 1997.

-- The average severance calculation formula for officers and senior-level
executives fell to 1.7 weeks of severance per year of service, from 2 weeks of
severance per year of service in 1997. The median severance calculation formula
for officers and senior-level executives remained at 2 weeks of severance per
year of service.

-- The average severance calculation formula for middle managers rose slightly
in 2001, to 1.7 weeks of severance per year of service, from 1.6 weeks of
severance per year of service in 1997. The median severance calculation formula
for middle managers rose to 2 weeks of severance per year of service in 2001,
from 1.5 weeks of severance.

-- The average and median severance calculation formulas for non-exempt
employees remained the same in 2001 as in 1997 -- an average of 1.4 weeks of
severance per year of service, and a median of 1 week of severance per year of
service.


Among the reasons for the continued decline in cash severance payments, according to Manchester, are:

-- Many employers have restructured their work forces in one way

or another during the past three decades through displacements

of employees. As a result, employee terminations have lost

some of their stigma -- for organizations and employees.

-- Severance policies are a reflection of the prevailing economic

climate as well as an organization's social conscience. In an

economy with a relatively low unemployment rate (4.5% in June

2001), displaced employees are generally requiring less time

to find new jobs than in an economy with a higher unemployment

rate.

-- Many employers are providing more advance notice of

terminations to employees. More organizations are also giving

employees "work-through" notifications, and awarding cash

bonuses to those who work up until the "work-through"

separation date, in addition to receiving their full severance

packages.

For a free copy of the survey report, send an e-mail to "Manchester Severance Survey Report" at prcomm@modispro.com. All requests must include name, position, company, address, and phone number.

Manchester Inc. is a career management consulting firm that specializes in improving organizational effectiveness through the identification, development, and transition of leadership talent. Manchester has expertise in three primary practice areas: career management, leadership development, and executive education and training. Manchester is a unit of Modis Professional Services, Inc. (NYSE:MPS) of Jacksonville, Florida. MPS is a global solutions provider enabling clients to effectively locate, retain and deploy strategic knowledge worker resources. The Company combines business processes and human intellectual capital to deliver strategic solutions in the information technology, accounting and finance, legal, technical and engineering, and scientific areas. Headquartered in Jacksonville, Florida, the Company serves the Fortune 1000 and other leading businesses in the United States, Canada, the United Kingdom, and continental Europe.

For more information on Manchester Inc., please see the following website: www.manchesterus.com. For more information about Modis Professional Services, Inc., please visit the following web site: www.modispro.com
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Publication:Business Wire
Date:Jul 10, 2001
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