Now may be the time for employees to check out what type of severance policy their company has and what their payment would be if they should lose their job. According to a survey by Unifi Network, a subsidiary of PricewaterhouseCoopers, companies that have already downsized once are likely to do so again. The Severance & Retention Practices: 2001 Survey finds that of the 114 companies surveyed, approximately 50 percent have downsized within the past 18 months. Of those, half plan to downsize again within the next 18 months.
“Executives and other employees need to educate themselves about their company’s severance policies so that they are financially prepared if the ball drops and they are let go,” said Todd McGovern, a director in Unifi Network’s compensation practice.
And dot-comers, who have been hit hardest during this layoff frenzy, could be in for Round 2, McGovern added. “Many ex-dot-com employees are now finding jobs in mainstream industries. As newly hired first-year employees, they face greater risk of being laid off,” said McGovern.
Eighty-eight percent of the companies surveyed have a severance policy. Of those companies, the majority (77 percent) base their severance payment on years of service, but some firms base their severance payment on salary grades. For example, for every $10,000 of pay, employees receive a week’s worth of severance.
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Staylor@tribune.com
