Severance packages have grown more generous in recent years, especially for executives, according to a new study.
The weeks of pay an executive can expect as severance have grown, and more companies are adopting outplacement benefitsas well as retention bonuses to ensure terminated employees will stay on up to a specified date.
The survey, conducted by Lee Hecht Harrison, a consulting and career-services company in Woodcliff Lake, N.J, analyzed responses from 1,030 senior human-resources executives.
The median maximum severance payout period for senior execs rose to 52 weeks, double the median of 26 weeks reported in 2001, the last time Lee Hecht Harrison conducted this survey. For nonsenior execs, the median maximum payout increased to 28 weeks from 26 weeks. It remained the same, 26 weeks, for professionals and administrative staff.
Benefits increased in other ways. Survey respondents reported a 10 percent increase in the availability of outplacement services as part of severance. Also, 51 percent of employers surveyed said they offer retention bonuses, up from 46 percent in 2001 and 36 percent on 1998.
Severance is rising in part because executives have negotiated benefits, said Bernadette Kenny, who headed the unit that conducted the survey. With executive tenure on the decline, executives are seeking greater security for potentially shorter stints, she said.
