Dear Workforce How Much Severance to Provide

It greatly depends on the company and the person, but here are some averages.

September 7, 2011

Onthe average, how many weeks do companies give in severance packages?

--Kathy Read, San Francisco, CA 

ADear Kathy: 

Severance varies greatly based on thetype and company, as well as the type of employee. The average severance whenall levels are combined -- hourly to executive -- is 1 ½ to 1/ ¾ weeks pay peryear of service. 

Certainly, that changes a lot when youget into golden parachutes and all that. But for employees earning less than$150,000, those averages are probably pretty accurate. 

Bill Hollett of Drake Beam Morin usesmainly age and level as factors when determining how much severance a companyshould give. Those factors affect how much time it takes to go into a new job. 

Hollett also says that he recommendsthat non-exempt employees be given a minimum of one week of pay for each year ofservice, even if they’ve been there a short amount of time, and that they begiven a minimum of about six weeks’ severance. 

He recommends that exempt employeesreceive at least two weeks’ pay per year of service, with a minimum of threemonths’ severance and a maximum of one year’s severance. 

Severance of course also varies bycountry; European countries sometimes have much greater requirements than in theU.S., where there are none. 

SOURCE:Bill Hollett, vice president of organizational consulting, Boston-based DrakeBeam Morin, December 5, 2000. 

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