Washington (Dec. 17, 2003) -- In the wake of increasing layoffs in the last three years, more companies are offering benefits beyond severance pay and outplacement assistance to employees who have been laid off, according to a Conference Board study.
In addition to continued health care benefits and priority consideration for reassignment to another job within the company, some firms are providing benefits like career and educational counseling, references, interview coaching, and education and training benefits to furloughed workers. It's called “compassionate” downsizing -- the "offering of services beyond outplacement to help employees find new jobs and to help transition employees with respect and care," according to the Conference Board.
Eighty-seven percent of respondents reported that their companies had experienced layoffs between January 2001 and December 2002. Among those that reported layoffs, a mean total of 1,022 employees were downsized, representing an average of 8.9 percent of their companies’ workforce. The study, "Compassionate Downsizing: Making the Business Case for Education and Training Services," is based on a survey of 369 senior human resources executives of midsized and large global companies.
While 84 percent of participants said their companies offered traditional outplacement assistance, 13.6 percent said they also offer education and training as transition benefits. Among companies providing education and training benefits, the average annual cost per employee is $4,025, the Conference Board reported.
The top four reasons for offering transition benefits to downsized employees are: to sustain the morale of retained employees; to demonstrate the company’s commitment to remaining employees; to manage former employees’ perceptions of the company; and to maintain the company’s reputation in the community.
-- WebCPA staff
