Issue: Survivors of recent layoffs are asking about severance plans before signing on.
Benefit: More than ever, a good severance plan can help lure the best candidates.
Action: Trumpet your plan if you've got a good one. If you don't, talk with the top brass about improving it.
Choppy economic conditions the past few years saw many employees ousted with little or no severance. As the economy improves, those cynical employees will look for safer waters, and they'll ask about your organization's severance package.
Advice: If you offer a good package, refer to it in want ads and interviews.
What should you pay out? When severance is based on years of service, it's typical forto earn one week's salary per year of service, says a study by consultants Lee Hecht Harrison. More senior execs are typically given two weeks per year of service.
What about people fired after less than a year? Two-thirds of employers set minimum payouts. Those minimums: three weeks pay for salaried employees and four weeks for execs.
While it's a good add-on perk, severance usually isn't a deal-breaker. Seventy-two percent of the job-seekers polled in a TruCareers survey said they'd accept a position that offers no severance pay. And 80 percent said they'd accept a package smaller than what they'd requested.
Final note: For a severance package to hold up in court, it must adhere to certain legal standards. It must be in writing and signed by both parties. Don't give employees an excuse to claim that their agreement is confusing; use simple language. And check with state laws; some make special rules for severance pacts.
Sample severance agreements: Several Web sites provide sample agreements that you can adapt. Three of the best:
- www.alllaw.com/forms/employment/ release_separation_agreement
- How to Fire an Employee the Legal Way: 6 Termination Guidelines
- Drug test inconclusive? Offer a second chance
- When terminating a veteran, can we ask her to sign a waiver of employment claims?
- When it comes to firing offenses, be sure you can show you treated everyone equally
- Hired him? You should be the one to fire him