Recently, we published our Guide to Severance and Workforce Transition, which outlines the results of an organic study examining the state of severance across U.S. industries, geographies and company sizes. For the study, we surveyed over 250 human resources professionals, more than one-third of whom came from Fortune-ranked companies and at least one-quarter of whom were VP-level and above, including CHRO titleholders.

Of the industries surveyed, 10% of respondents were from the banking and financial industry, and the responses of the companies in this category were fairly comparable to the average responses found in the study. For example:

  • 67% of banking and financial organizations responded positively that all employees are eligible for severance resulting from involuntary separation, compared to the study average of 61%.
  • 67% of banking and financial organizations offer outplacement services as part of severance, compared to a study average of 70%.
  • 67% of banking and financial organizations responded positively that there is a standard length of time offered for outplacement, compared to an study average of 64%; however, the amount of time offered varied widely within the banking and financial industry.
  • 50% of banking and financial organizations offer outplacement programs that leverage a combination of technology and services including coaching, compared to a study average of 56%.

While some industries in the study were divided on whether or not they had a formal, written severance policy in place, respondents from the banking and financial industry were unanimous, with 100% responding positively that a formal policy existed. Other metrics in which banking and financing companies outperform other industries in terms of severance and outplacement include:

  • 67% of banking and financial organizations responded positively that all employees are eligible for severance resulting from involuntary separation, compared to the study average of 61%.
  • 67% of banking and financial organizations offer outplacement services as part of severance, compared to a study average of 70%.
  • 67% of banking and financial organizations responded positively that there is a standard length of time offered for outplacement, compared to an study average of 64%; however, the amount of time offered varied widely within the banking and financial industry.
  • 50% of banking and financial organizations offer outplacement programs that leverage a combination of technology and services including coaching, compared to a study average of 56%.

The top three reasons banking and finance organizations provided for offering severance packages to displaced employees were in line with the most common answers across all of the industries surveyed. Those responses included caring for employees, limiting company liability, and protecting brand reputation. In addition, banking and financial organizations also listed maintaining a positive relationship with the displaced employee as a potential rehire or potential customer as key reasons for offering severance packages.

There were also areas in which the industry varied drastically from the study average including:

  • 83% of banking and financial organizations responded negatively that the cost of outplacement is approximately the same for all employees, compared to a study average of 54%.
  • None of the of banking and finance organizations monitor employer review sites such as Glassdoor for positive and negative comments by employees during a major layoff event, compared to a study average of 40%.

The complete study expands upon these findings and offers in-depth benchmarking data and analysis for companies to compare severance, benefits, and outplacement across industries. Download RiseSmart’s Guide to Severance and Workforce Transition to learn more about the role severance and outplacement play in the banking and financial industry: www.risesmart.com/GuidetoSeverance.

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