Planned layoffs are at a record low heading into 2015, according to a survey released Dec. 3 by the nonprofit total rewards association WorldatWork.
The Severance and Change-in-Control Plans Survey found that 43% of almost 600 participating organizations don’t anticipate any reduction in force in the next 12 months.
That’s the lowest level since WorldatWork began conducting the survey in 2003.
An even 33% of respondents said they were planning for layoffs in 2015, well down from the 56% who said they had experienced RIFs this year.
Many of the layoffs that do occur will be the result of mergers and acquisitions, which surged past pre-Great Recession highs this year. Through mid-November, more than 500 mergers worth at least $1 billion had been transacted, and 30 mergers topped $10 billion in valuation.
Almost all employers surveyed said they offer some form of severance pay for laid-off employees—74% have formal severance policies, and another 15% said they have unwritten plans.
“Organizations understand that severance plans are critical to have in place, and the majority of organizations have established plans and programs to use when necessary,” said WorldatWork’s Don Lindner.
Key findings from the report:
• The most common minimum severance paid to laid-off employees is two weeks’ salary, cited by 32%; 20% said they most commonly offer one month’s salary.
• At 30% of organizations, severance maxes out at one year’s salary; 16% said they offer a maximum of 26 weeks’ pay. Those packages typically go to CEOs and senior executives.
• By far the most prevalent consideration for the amount of severance benefit received is years of service. Over 90% of participating organizations said they base severance—at least in part—on an employee’s tenure. Other severance pay factors considered include position, pay level or terms set by an employment agreement or collective bargaining agreement.
• 63% of employers reported that they subsidize COBRA continuation health insurance coverage for laid-off employees.