Almost 2 in 3 Asia Pacific firms will offer outplacement where there is no legal requirement

The rumours have been rife since the big merger was announced. You know there are too many people at the other company to absorb into your department, and colleagues have been jockeying for the boss' attention ever since, not that his (or her) position is guaranteed, either. Finally, HR calls you up for the meeting that everyone has been waiting for..

“When you get fired, outplacement is often the consolation prize,” says Nick Corcodilos, a US-based HR consultant in a November 2013 issue of his popular ‘Ask the Headhunter’ e-newsletter. While the employer works with an outplacement firm to find a new job for the soon-to-be ex-employee, Corcodilos notes that outplacement can be two-edged, particularly if an employer is only offering the service because of legal compliance.

Interestingly, a new 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, has found that many employers will pay for outplacement services even when they do not have to do so on a legal basis.

Globally, 68% of respondents said they will ‘provide outplacement even where it is not legally required’ against 70% in the Americas and 68% in Europe. In Asia Pacific, 65% of respondents, almost two in three firms, will help employees with outplacement even if there is no legal requirement to do so.

Corcodilos advises his readers however to participate actively in looking for a job, and suggests taking cash in lieu of an outplacement package, a practice that is also surveyed in Right Management’s report. “Never forget that you are responsible for your next career step,” Corcodilos says.

Source: Right Management. Click here to view the full infographic.

*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.

Severance packages in region to be upgraded in favour of employees: Right Management

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.

Formal severance policies dominate in Asia Pacific: Right Management

Right Management, a global outplacement provider, has observed that companies in Asia Pacific show a noticeably higher incidence of formal policies—particularly in Japan (94%) and China (92%).

A new global report commissioned by the company titled Severance Practices Around the World notes that when asked if their company had a formal, written severance/termination benefits policy, 75% of respondents globally said yes, with another 32% claiming an informal or unwritten policy, or a general practice.

Source: Right Management. Click here to view the full infographic.

In Asia Pacific, the incidence of companies which had a formal policy numbered 82% against numbers in the low 70s for both the Americas and Europe. A further 34% said they had informal policies, while 18% said they were guided instead by the law.

Severance is essential as it impacts not only those who are leaving, but also those who remain and individuals who might be attracted to the company in the future, said Right Management.

To attract talent, the company suggests that businesses should develop a value-based talent management strategy that “aligns compensation, rewards and severance practices and positions the business as an employer of choice”. “Leverage this strategy in your recruitment efforts to attract the best and brightest talent in the market,” said authors of the report.

A good severance policy will also help the business to retain high-Value employees, added the company. “Demonstrating fairness and concern and providing equitable severance for departing employees sends a positive message to those who remain. Should they find themselves in a similar position in the future, they know that the organisation will treat them with dignity and respect and support them with the benefits that help them transition to a new opportunity,” the authors explained.

A third advantage of putting a good severance strategy in place has to do with the talent remaining in the company. “Many are watching the company, its leaders and their own managers to observe how separated employees are treated. Employees will remember not only what you did, but how you did it.” said the authors.

Ensuring transparency about separation policies and practices means that there is little room for conjecture and misinformation to spread, and a greater chance that all employees will trust that their company will treat them fairly, consistently and in good faith, said the authors.

The report advises readers to develop a plan to ensure everyone is well informed about all benefits and advantages included with the provision of outplacement as employees who have been with a company for a long time may not be aware of what the job market wants, best practices for landing a new opportunity, nor even about new ways to apply for a job.

"The increasing importance of talent to an organisation's success has created a new focus on how severance practices, as part of a broader workforce strategy, can impact a company's brand value," noted Bram Lowsky, Right Management's Group Executive Vice President and Global Head of Career Management. 

"The need to continually realign and right-size talent persists in today's uncertain economic environment, and companies that have competitive severance practices in place are ahead when it comes to future retention and recruitment efforts and engagement of remaining employees after a restructuring.

"Regardless of location and industry, we're seeing an evolving and strengthening connection between competitive severance practices and favorable brand image in the marketplace. Organisations that provide outplacement support and demonstrate fairness, care and respect for those leaving not only ensure a positive restructuring outcome, but also realise an improved brand value that ultimately attracts new and retains current employees."

*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.