By TEH SHI NING

Companies in the Asia-Pacific region in general are likely to have formal, written severance policies in place, according to a survey conducted by human capital consultancy Right Management on severance practices worldwide.

However, just 29 per cent of Singaporean companies surveyed had a formal written termination or severance benefits policy, compared to 76 per cent of Asia-Pacific companies and 58 per cent worldwide. Instead, most rely on an 'informal, unwritten policy or general practice'.

It must be noted, though, that this is based on just 14 responses from Singapore companies in a global study which polled over 1,500 human resource professionals and senior managers online between July and September 2008.

Presenting the survey results to 55 HR professionals at a briefing yesterday, Michael Lee, a senior consultant with Right Management, explained that 'the ambiguity surrounding severance without a formal policy adds to HR practitioners' workload . . . allowing both management and employees to bargain or push for lower or higher severance pay packages', and encouraged them to formalise severance practices.

Right Management research shared at the session also showed that organisations which actively engage employees during restructuring are 44 per cent more likely to turn in above-average profits - ample justification, the consultant said, to persuade management that severance packages are not an extra burden but can minimise profit erosion and ensure continued employee productivity.

In a downturn like the present, Mr Lee said, companies need to be aware that 'letting go also impacts their brand'. By 'aligning severance practices to the organisation's culture and values', he said, a company can strengthen its brand 'to draw not just customers but also top talent when the upturn comes around', and with it, rehiring.

The survey also provided benchmarking data on severance pay packages, eligibility for severance, and the extent to which benefits such as outplacement or financial planning help, and retention bonuses form part of companies' severance policies.

One such benchmark was the mean number of weeks of severance pay offered per year of service to top executives who were involuntarily retrenched worldwide: 3.52. For Singapore and Asia Pacific, this was 3.67 and 3.61 weeks respectively.

The median figure offered to involuntarily retrenched top executives worldwide, in Asia Pacific and in Singapore was 4 weeks of severance pay per year of service.

Right Management is a wholly-owned subsidiary of the NYSE-listed global human resource consultancy Manpower Inc, whose Employment Outlook Survey for Singapore for the first quarter of 2009 showed that almost half of over 600 Singapore employers expect to cut jobs in Q1.

This article was first published in The Business Times on January 14, 2009.