Letting a worker go can cause disruption to any organisation but this is not the only reason for getting it right.
Having the right practices and procedures in place can not only help an organisation manage the process efficiently, it can also help uphold its reputation, according to a new study.
Right Management recently published its Severance Practices Around the World report, and one of the main findings was that an organisation’s severance practices can determine its success in a range of other procedures – including attracting and retaining future talent.
Bram Lowsky, global head of career management at Right Management, said there is an increasing need for organisations to focus on severance as “part of a broader workforce strategy”. This is because it can ultimately impact the company’s brand image in the eyes of potential employees.
“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 restructuring,” he said in a 21 January statement.
One of the severance best practice points an organisation should observe, Mr Lowsky says, is to have a formal policy in place outlining the benefits involved.
In fact, the survey revealed that organisations in the Asia Pacific region were relatively more likely to have such a policy in place. Around 82 per cent of companies in Asia Pacific had a formal, written severance policy, compared to the global average of 75 per cent.
In addition to monetary payouts, Right Management suggests that firms should also be going above and beyond to help ease the transition for the former employee. For instance, the survey found that 68 per cent of organisations offer outplacement services, even if this is not required by law.
Having the right severance practices is not just about limiting the financial impact on your organisation – it can also strengthen your recruitment prospects in the long term as well.