Australians earn less severance pay

Employees laid off in Australia earn one of the least amounts of severance pay worldwide, according to a new survey from Right Management.

The new study shows that Australian ex-employees receive an average 22% less than global counterparts, with just 2.79 weeks severance pay per year of work compared to a worldwide average of 3.6 weeks.

Additionally, the figures apply to employees at all levels, from top executives to managers, technical directors and other workers. But in contrast, Australian workers receive better assistance programs, retirement planning, and retraining and relocation assistance than employees worldwide.

Right Management’s general manager of Australia & New Zealand, Bridget Beattie, says severance pay is a vital issue for any company.

“It is an important responsibility to get it right because it has a dramatic impact on the lives of the individuals being made redundant, those who remain in the organisation and those who might be attracted to it in the future.

“Smart organisations recognise that the actual severance package is only part of the equation. The entire process of restructuring or downsizing, of which severance is a component, must be run smoother, faster and with more communication than ever before.”

The mean weeks of severance per year of service include:

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Involuntarily exit: Australia Worldwide
Top executives

2.98

3.81

Senior executives

2.90

3.71

Department heads/managers

2.80

3.64

Professional/technical

2.69

3.46

All other employees

2.59

3.36

Voluntarily exit:
Top executives

3.06

3.30

Senior executives

3.00

3.47

Department heads/managers

2.90

3.29

Professional/technical

2.71

2.94

All other employees

2.57

2.81

 

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