More than 55 percent of human resource professionals of Northeast organizations have had a layoff in the past 12 months, according to respondents from a new e-survey by the Northeast Human Resources Association (NEHRA). NEHRA, the premier HR association in New England with nearly 3,500 members, conducted the e-survey to determine if and how companies are being impacted by the current economic condition and if they are experiencing reduction in workforce issues.
"The results from our survey were not a surprise given the current economic climate we are working and living in today,” said Deborah Hicks, NEHRA’s board chair and vice president of HR at Harvard Pilgrim Health Care.
“This is a significant issue facing many organizations and for many human resource professionals around the northeast this translates into workforce reduction planning. The results of our survey clearly showcase how significant the economy is playing into recent and future layoffs.” she said.
While 55 percent reported going through a layoff cycle in the past 12 months, more than 19 percent report they are currently going through one; and more than 29 percent anticipate having a layoff in the next 6 to 12 months.
More than 71 percent cited the economy as the biggest reason their organization was laying off employees. Less significant but still reported as being a reason for layoffs were loss of a major client, at more than 15 percent; loss of funding at 10 percent; and a recent product failure at 3 percent.
About 61 percent of human resource respondents reported that they did not take into consideration the adverse consequences on the diversity of their workforce when considering who to layoff; while more than 16 percent did take this into consideration; and more than 21 percent were not sure.
More than 54 percent of respondents replied they did not give special consideration to employees dealing with personal home life challenges (i.e. impending surgery, spouse terminally ill, single parent, etc.) when deciding who to layoff. About 19 percent did give special consideration to employees with personal challenges and more than 27 percent were not sure.
A homegrown rating and ranking system was reported to be the most popular method used to select an employee for layoff; a last performance review was reported as the next most popular method by 41 percent; followed by seniority at 26 percent. Only 33 percent alert the Department of Employment Security when laying off employees. Approximately 33 percent do not, while 27percent are not sure. Overwhelmingly, 91 percent of human resource executives surveyed provide each employee with information regarding how to file and unemployment claim. Only 2 percent said they did not while 7 percent were not sure.
More than 83 percent reported paying severance to laid off employees, while 18 percent did not. When asked what formula they used, the responses varied. Some included two weeks plus one additional week for every year of service, to one week plus two additional weeks for every year of service. Some offered a maximum of 12 weeks, while the others offered a maximum of 24 weeks. Some offered the standard 2 weeks for part time employees. More than 78 percent require each employee to sign a release in order to receive severance pay.
When asked if outplacement assistance was offered over 51 percent replied yes, while 39 percent did not and 10 percent were not sure. Over 83 percent use a professional outplacement assistance firm while only 16 percent used an internal program. Managers were reported to be present by 54 percent of respondents when an employee was notified of a layoff, while 45 percent reported a human resource representative to be present. Not one respondent reported asking security to be present. Finally, when asked if managers are trained on their role in the termination meeting with the employee, more than 91 percent reported their managers were trained for such situation, while 9 percent said they were not.
About NEHRA and the survey
About 3,500 HR professionals, representing large and small companies in all industries within the region, as well as individuals providing products and services to the human resources community, comprise NEHRA’s membership base. A total of 176 NEHRA members and nonmembers responded to the online survey, which was conducted from Oct. 24 to Nov. 7, 2008.
NEHRA is New England’s premier human resources association. Since 1985, NEHRA has provided HR professionals with programs, information and relationships that stimulate professional growth and enhance workplace contributions. The mission of the Northeast Human Resources Association is to lead, advance and influence the management of human resources and its impact on organizational success. For more information, visit www.nehra.com.