The majority of Asia Pacific firms which plan to update their severance policy in the next 12 months are planning to increase the benefits or pay that can be received by outgoing employees, according to a global report titled Severance Practices Around the World commissioned by Right Management, a global outplacement provider with 30 years of expertise and which invests US$2 million annually on proprietary research.
At least 3 in 4 (78%) of the respondents from Australia, China, Hong Kong, India, Japan and Singapore which indicated they would be changing their severance policy in the next 12 months are revising it in the favour of the employee. More than 90% of the respondents in China and India will be doing this, with more respondents saying they would be moving benefits and pay upwards across all countries except in Japan, where slightly under half of respondents will be doing so.
The key findings of the study include:
Across all regions, severance policies are most frequently governed (52%) by a combination of company policy and local/national law.
In the event of an employee termination, most companies (62%) are required by law to give a certain amount of advance notification to the employee.
Three out of four of those surveyed (75%) said their company had a formal, written severance policy.
Source: Right Management. Global figures reported. To view the full infographic, click here.
Eligibility for severance differs around the world and one-third (33%) of participating companies require a year or more employment for employees to qualify for severance benefits.
"The complex nature of operating in a global economy means that our information needs are even more intricate, requiring resources to help navigate the labyrinth of local laws and cultures. While practices across the globe frequently converge on the numerous severance and termination policy issues studied, wide and varied results can still be found between them. Even within regions, such as Asia Pacific, findings can contrast greatly between market economies – Japan being one example – and countries with heavy governmental controls, such as seen in China,” said Ronnie Tan, Group Executive Vice President – Asia Pacific & Head of Talent Management, Right Management.
*Input was gathered from 1,859 senior leaders and human resource executives in 19 countries via an online survey between April and May 2013. Right Management sponsored the study, and the research was executed by a third-party firm, US-based International Communications Research. The organisations surveyed were not selected by Right Management, although some clients may have been included in the survey sample. The respondents included 528 from the Asia Pacific region, specifically from Australia, China, Hong Kong, India, Japan and Singapore.