NEW LHH REPORT REVEALS RISE IN SEVERANCE IN NORTH AMERICA AMID INCREASED MARKET VOLATILITY

A survey of 700 HR leaders across 500 U.S. and 200 Canadian organizations revealed 90% of firms now offer severance, with 70% enhancing packages recently, as companies prioritize employee support and brand reputation

NEW YORK, Nov. 18, 2024 /CNW/ -- LHH, a leading integrated talent solutions provider and global business unit of the Adecco Group, today unveiled the findings of its Severance & Separation Benefits 2024 Benchmarks Study. Based on surveys of 500 U.S. and 200 Canadian HR leaders, this study reveals that severance has become standard practice across North America, with nearly 90% of organizations now offering severance packages and 91% reviewing their policies in the last two years.

Last conducted in 2020, this year's study seeks to explore the current landscape of severance and separation benefits, defined by the volatility of today's labor market and the implementation of new technologies like AI. In the face of rapid change, LHH found that organizations are placing increased emphasis on the employee experience by formalizing and expanding severance offerings and considering the benefits of redeploying or upskilling employees.

"Our newest study shows that severance policies are increasingly being viewed as strategic assets, as organizations are seeing the value of attracting and retaining top talent in an uncertain world of work," said John Morgan, President of LHH's Career Transition & Mobility and Leadership Development businesses. "By bolstering severance offerings and communicating benefits effectively, organizations are strengthening their brand reputation while reaffirming their support to both outgoing and remaining employees."

Key Findings Include:
Increased Generosity in Severance Packages
Severance offerings are improving, with 70% of companies enhancing their packages in the last three years, and only 11% reporting a decrease in generosity. In Canada, 65% of organizations increased their severance provisions, particularly in sectors like media and utilities, where 88% of respondents stepped up their offerings. This trend reflects the increasing awareness of how employee experiences in separation and severance negotiations can significantly impact a company's reputation, causing a majority of companies to enhance packages accordingly.

More Tech-Driven Outplacement Services
Integration of technology in outplacement services is on the rise, with 50% of U.S. organizations identifying tech as a key resource—an 18-point increase since 2020. This increase indicates a shift towards blending personal support with innovative solutions. Moreover, 52% of HR leaders view outplacement services as vital for organizational transformation, emphasizing the need to equip departing employees with essential skills and resources.

Greater Emphasis on Communication
Companies are utilizing multiple channels to communicate their severance policies effectively, with 60% to 67% relying on employee handbooks, online resources, and direct communication from supervisors. This multi-channel approach ensures transparency and accessibility for employees navigating these sensitive processes.

Considering Redeployment and Upskilling/Reskilling
An increasing number of organizations are comparing the cost of terminating employees to the cost and benefits of upskilling/reskilling or redeployment. This year, almost two-thirds (64%) of organizations implemented a redeployment program after comparing termination and redeployment costs, compared to only 22% in 2020. Only 14% of organizations did not consider any alternatives to termination, down 21% from 2020.

Visit the Severance & Separation Benefits 2024 Benchmarks Study for more insights.

About LHH
LHH is an integrated talent solutions provider helping people, teams, and organizations prepare for what's next in the future of work. Through Career Transition & Mobility, Leadership Development, and Recruitment Solutions, our end-to-end offerings allow us to work across the entire talent journey to help future-proof organizations and careers all over the world.

With over 8,000 colleagues and coaches spanning 60 countries worldwide, LHH combines global infrastructure with industry-leading technology and local expertise to help more than 15,000 organizations and nearly 500,000 candidates each year.

LHH is a global business unit of the Adecco Group, the world's leading talent advisory and solutions company, headquartered in Zurich, Switzerland.

To learn more about LHH, visit: https://www.lhh.com.

Media contact: [email protected]

SOURCE LHH