What's the Point of Separation Pay?

The New York Times recently reported a surge in company hiring and cross-industry job postings. Somewhat good news for the unemployed, yet with so many people in the job market, companies may acquire talent far overqualified for open positions at very low costs. Grim, yes. Hiring in the near future might allow companies to offer fewer perks to those coming in primarily because unemployed workers need new jobs.

But what about the employee who remained after the huge layoff? Those who became parts of skeleton survival crews are also free to take advantage of this hiring spree, a fact of which more companies are slowly becoming aware. How might companies retain these employees? Benefits, and one quite salient to workers who survived recent layoffs, separation pay. Separation benefits were a nonentity to some who lost jobs in 2008 and 2009. Conversely, others received huge severance packages, insulting those employees left to pick up the extra work left by their laid-off colleagues.

SUB Pay allows an employer to ensure meaningful separation benefits to employees, even in times of crisis, by slashing the employer's benefit cost. SUB Pay also meets the typical severance-related needs of an employer, mitigation against legal retribution, and, as is critical right now as employee options open up, maintenance of employee morale. Separation pay is, in fact, a benefit, and the forthcoming turnaround should prompt companies to examine strategies which use its promise not merely to recruit new workers, but properly to retain critical and valuable employees in the case of another recession period.