Tight Labor Market Coaxes New Benefits out of Employers

Today’s employees and jobseekers are benefitting from the simple law of supply and demand: With unemployment at a historic low and companies scrambling to fill open positions with qualified workers, candidates are in the type of power position that eluded jobseekers not so long ago.

Today, many jobseekers can be more selective in their search for employment, which is compelling companies to work harder to attract – and retain – talent by offering more and/or better benefits.

RiseSmart’s 2019 Guide to Severance & Workforce Transition surveyed 1,500 HR professionals around the world to identify the most striking trends shaping severance and outplacement services.

The global survey contains a number of salient findings. Here are four takeaways:

1. Companies are offering severance to more employees. Almost half (44%) of employers surveyed say they now offer some form of severance benefits to all employees, instead of just to senior managers. At the same time, changing jobs every few years has become a normal career path and, with a looming recession, layoffs may become more commonplace. For mid- and low-level workers, knowing that they can receive severance benefits may mean they have less financial anxiety between jobs – and less impetus to take the first opportunity that comes along.

2. More companies are offering internal transfer options. Almost two-thirds (60%) of survey respondents claim to have programs designed to match employees with internal positions to cut down on employee turnover and better balance their workforce as needs change from department to department thus avoiding the high costs related to layoffs whenever possible. Employees who want a change and know they can move internally are more likely to explore those options before looking outside the company. Having programs in place that allow for, or even encourage, redeployment can incentivize performance, improve morale, and build a more cohesive workforce from which managers seek to hire, rather than recruiting outside the company. Redeployment can also help companies avoid the high costs of hiring new workers.

During times of workforce reduction, organizations are often still hiring in other departments or business divisions. An effective redeployment program allows organizations to reduce the number of employees impacted by the reduction and increase the probability that remaining employees will perceive the company as one that values its employees beyond the roles they fill today. Encouraging internal mobility is an effective method to retain institutional knowledge and valuable talent while preserving the employer brand. Companies looking for ways to impact the bottom line gain a positive financial benefit through cost savings associated with recruitment, hiring, and onboarding employees new to the organization.

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3. Companies are nervous about negative online comments. Two-thirds (66%) of employers claim they monitor websites like Glassdoor and Indeed for negative reviews – a 10% increase from 2017.

Companies are trying new ways to stop displaced workers from turning to social media to retaliate against their former employers. Half of companies that offer severance also offer outplacement services as part of those packages, a service that can include personal career coaches and resume writers and personalized job leads.

The thinking is that if a company helps workers it has laid off find new jobs, those workers will be less inclined to post negative comments about them and more apt to return as boomerang employees or recommend the company to a friend.

4. Companies are expanding benefits to craft “employee-first” cultures. More companies are adopting the position that better benefits can attract top talent and help with worker retention. RiseSmart’s severance study indicates that organizations are continuing to invest in those assets that are most critical to success — talent. Employers, it seems, are seeing employees for what they really are: the lifeblood of a company. Instead of viewing the employment relationship as finite, organizations are realizing that former employees remain an integral part of the fabric of the company — as customers, competitors, boomerang employees, and references. Best-in-class employers understand that treating impacted employees as well when they are asked to leave — through no fault of their own — as they do when they’re hired is a critical component to success when  it’s time to hire again.

Emily Elder

Emily Elder
Emily Elder is senior manager of practice development at RiseSmart.

Emily Elder

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