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Survey Report

2020 Global Severance Policies and Practices survey report

Compensation Strategy & Design
COVID 19 Coronavirus

By Darryl Davis and Doug Gerke | July 2, 2020

New global survey gives a glimpse into how global employers are tackling some of the most difficult business decisions.

Just about every employer has felt the impact of COVID-19 on a variety of business fronts, most notably regarding their financial results and daily operations. For many companies cost control will remain a practical reality for the foreseeable future. Results from Willis Towers Watson’s recent 2020 Global Severance Survey of over 400 companies operating across 24 major economies show that most global employers expect business performance to continue to be impacted over the year to come, with a substantial proportion expecting a moderate negative impact or worse.

Bar chart showing company actions regarding layoffs
Company actions regarding layoffs

While participating companies commonly cited a variety of temporary cost control measures (such as hiring freezes and reduced or delayed merit increases), a notable minority indicated the need for stronger measures. Over a third of companies reported that they had furloughed or planned to furlough at least a portion of staff, while over a quarter similarly reported reductions-in-force.

While being an employer is never easy (much less a global employer with staff located in diverse markets), it’s safe to say that there are certain aspects of employing people which are harder than others. At the top of list for many managers and HR professionals is having to make the ultimate decision to let employees go. Along with the obvious human aspect, there can be a variety of regulatory, legal, cost, cultural and image-related considerations at play.

For employers conducting dismissals across multiple jurisdictions, the complexities can seem overwhelming in one location and deceptively simple in another. Global policies to observe only statutory requirements may seem practical in theory but fail to account for the myriad of possible intangibles that local employers may have to deal with, especially in places where what’s mandatory may be vague or non-specific. As a result, understanding everything which must be done (or at least considered) can be a challenge.

On top of that, depending on the country and specific circumstances, company actions may be subject to various influences or practical considerations beyond what’s prescribed by law (if anything). Just a few examples include the role of Works Councils (Germany) or unions in the selection of employees for redundancy, the selection of foreign workers over locals in comparable roles (Saudi Arabia and United Arab Emirates), and disparate impact analyses based on anti-discrimination laws (United States).

Therefore, unlike virtually all other phases of the employment life cycle, the exact requirements and costs relating to termination can be exceedingly difficult to quantify in advance. What’s more, in a worst-case scenario a company’s intended actions can potentially be wholly undone or blocked, leading employers to have to reinstate staff or being refused permission to undertake redundancies in the first place.

If you would like to know explore the full findings of the Global Severance Policies and Practices Survey, please visit our Data Services project page.

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Darryl Davis

Doug Gerke

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