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Despite a surge in layoffs over the past year, just one-quarter of HR pros at US companies surveyed in Q3 by recruitment company Randstad said their firms offered severance packages to all employees. That’s lower than counterparts in the UK, 54% of whom reported offering severance to all employees, or Germany, which averaged 47%.
Labor protections for departing employees are less strict in the US than in some European countries, which helps explain why US firms are less likely to offer severance, said Lindsay Witcher, global managing director with Randstad RiseSmart, an HR arm of the company.
Overall, severance packages this year look less generous than they did in 2021, when 64% of respondents surveyed said their organizations offered them, according to an email from Randstad’s James Warnette. Facing more difficult financial headwinds, firms are “juggling with wanting to do the right thing in some cases and wanting to offer severance, but not being able to afford to do so at maybe the rate that they were doing during the pandemic,” Witcher said.
While severance is most often associated with a cash payout, there are other benefits HR can consider offering to employees to ease the sting of layoffs. One solution that’s becoming more popular with employers is redeployment, an internal mobility program geared toward affected workers.
Redeployment > layoffs. Some 40% of respondents said they anticipated their company would offer redeployment programs to their employees over the next 12 months. Most professionals surveyed said they considered services such as notifying employees of internal job leads or providing internal networking to be part of a redeployment program.
Typically, if companies offering redeployment know certain employees are being affected by layoffs, they “give those people an opportunity to find another job within the company before they actually exit the organization,” Witcher said.
Witcher spoke to a business case for redeployment, given it can help save organizations talent acquisition costs. And while it takes time to build up an effective redeployment program, doing so may benefit companies in the long run as they contend with labor challenges posed by new technologies like AI, as well as population decline. Layoffs may be up this year, but talent scarcity is still a risk for employers down the road.
“By getting really good at retaining the talent you have and moving them around within the organization based on the changing needs and strategy of the organization, you’re going to protect yourselves a little bit from that volatility of the talent market,” Witcher said.