HALIFAX, Nova Scotia – Royer Thompson Management & Human Resources Consulting today released the 2018 Termination & Severance Practices in Canada Study, the only survey of its kind that reflects data strictly from Canada. This year’s survey reflects that Canadian companies continue to make difficult decisions to optimize company performance however, these companies care about their people which is reflected in their severance and transition strategies.
“When workforce changes become necessary, such as restructuring and downsizing, employers continue to help affected employees deal with job loss by providing transition services as part of the severance package,” says Kim West, president of Royer Thompson. “Overall, respondents say the economy in 2018 is strong – most companies surveyed anticipate the same or slightly fewer transitions over the next 12 months than in the previous years.”
Employers are concerned for the future of their employees even after departure from the organization. 74% of respondents say they provide outplacement services to transition employees because they believe it is the right thing to do. 56% of respondents want to help employees receive the skills and training needed to succeed in their next job and almost 50% provide career transition support to mitigate risk of being sued by a terminated employee. Nearly half of the employers respond that they provide support because they believe it will send a positive message to remaining employees.
• In 2018, individual performance (64%) is the main factor for terminations, followed by organizational structural change (59%).
• Looking ahead, survey respondents expect the main cause of employee terminations over the next 12 months to be organizational structure change at 57%, individual performance at 52 % and business strategy change at 29% as the third cause. In 2016, only 41% of respondents picked individual performance as a primary factor in employee terminations going forward.
• 79% of respondents in 2018 identified job level as the major criteria for length of transition program, which has been steadily rising over the past four years. 47% of respondents cite expected difficulty of job search as a criterion – 47% in 2018 vs. 41% in 2014.
• Career transition services are included in the majority of termination packages, with approximately 80% of participating organizations including these services at the executive and manager level, and the majority of participants providing these services at the professional level.
• In 2018, employers are typically offering executives four to six-month career transition programs, down from six to 12-month programs in 2016. For professional and management positions, the most common career transition program provided to terminated employees is three months.
• Ninety-two percent of those surveyed required employees to sign a formal release to receive their full severance.
• There is some variety in severance payment structures, however, a key trend is prevalence to lump-sum severance today, rather than salary continuance.
Royer Thompson is the Atlantic partner of VF Career Management, a network of individually owned and operated Canadian companies who specialize in career transition services. Partners across Canada collaborate on the survey as part of their continuing commitment to understand the context in which we provide career transition services, conducting the Canadian survey in 2014, 2016 and 2018. Data for the 2018 Report was collected this spring from 176 respondents across Canada. Similar surveys were conducted in 2014 and 2016.
Contact: Harriet Wiegert
Royer Thompson is a Canadian talent management firm focused on capturing the full potential of people in organizations by supporting a shared sense of purpose, recruiting and cultivating leadership, and fostering an innovative and entrepreneurial spirit.