Dear Workforce How Much Severance to Provide

QDearWorkforce:

Onthe average, how many weeks do companies give in severance packages?

–Kathy Read, San Francisco, CA 

ADear Kathy: 

Severance varies greatly based on thetype and company, as well as the type of employee. The average severance whenall levels are combined — hourly to executive — is 1 ½ to 1/ ¾ weeks pay peryear of service. 

Certainly, that changes a lot when youget into golden parachutes and all that. But for employees earning less than$150,000, those averages are probably pretty accurate. 

Bill Hollett of Drake Beam Morin usesmainly age and level as factors when determining how much severance a companyshould give. Those factors affect how much time it takes to go into a new job. 

Hollett also says that he recommendsthat non-exempt employees be given a minimum of one week of pay for each year ofservice, even if they’ve been there a short amount of time, and that they begiven a minimum of about six weeks’ severance. 

He recommends that exempt employeesreceive at least two weeks’ pay per year of service, with a minimum of threemonths’ severance and a maximum of one year’s severance. 

Severance of course also varies bycountry; European countries sometimes have much greater requirements than in theU.S., where there are none. 

SOURCE:Bill Hollett, vice president of organizational consulting, Boston-based DrakeBeam Morin, December 5, 2000. 

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