Severance Pay Policies Around the World


Navigate the complex world of employee termination and severance pay with this report based on a global survey from Mercer. See how companies around the world and in your market structure their severance pay polices, determine who is eligible for payouts, and calculate the proper amount for each individual.

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Severance pay and separation policies vary significantly around the world. Local labor laws, collective bargaining actions, and market conditions all affect the termination process, and companies operating in several markets must be sure to adjust their behavior based on local standards and requirements.

Mercer’s Severance Pay Policies Around the World breaks down and analyzes global practices for termination and severance pay, offering unprecedented access into how today’s leading organizations handle this sensitive but critical HR area. Use this publication to learn how businesses construct and distribute severance pay to their outgoing employees, and see how your organization can differentiate itself from its competitors when saying goodbye to staff.

How can Severance Pay Policies Around the World help you?

How might severance payments affect your organization’s position within the job market? 

Prospective employees may not consider your termination policy when looking for jobs within your organization, but they will evaluate your employment brand within their community. Severance payments go a long way towards preventing negative sentiments among former employees. which can greatly improve the likelihood that they’ll encourage others in their network to consider your firm.

Should you offer severance payments in a lump sum or via salary continuation?

Employees facing termination may have varying preferences based on the labor market and their benefits arrangement, but employers need to consider how a lump-sum versus salary continuation payments may affect their balance sheet. Learn the pros and cons of each of these approaches, as well as what employers around the world prefer.

What should you account for in severance payments?

Most employers think of severance payments in terms of months or weeks of salary, but many employees derive considerable portions of their income for variable rewards and bonuses. Find out how you should factor in these elements of compensation when calculating severance payments for outgoing employees.

Report Composition

Severance Pay Policies Around the World is composed of three main sections:

  • The Summary of Key Findings serves as an executive summary for those looking for standard global practices for severance pay, severance policy trends, and other notable takeaways from the data collected in Mercer’s global survey. Analyzed topics include:
    • Scope of severance pay policy
    • Recognition of prior service after returning to organization
    • Salary in lieu of notice period
    • Method of severance pay distribution
    • Method of calculating severance payment
  • The Regional Sections provide data for all 32 markets within the report, offering detailed information for HR professionals looking for actionable data.
  • The About this Report section delineates the methods of data gathering and cleaning used for the report and lists key definitions.

More Product Details

Data included for each market:

  • Severance pay policy
  • Notice period
  • Severance payments
  • Payment formula

Career levels included:

  • Executive
  • Management
  • Professional
  • Para-professional

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