Putting Workers Back on The Job

The new jobs bill.

Preceding the announcement by Wall Street of the impending layoffs of nearly 50,000 workers, the jobs bill seems to have come at just the right time. The unemployment rate in the United States continues to hover between nine and ten percent. Coupled with the nonexistent job growth in August, this indicates the urgency of the new jobs initiative. Our stalled economy will continue to force companies into more headcount reductions. And consequentially into spending huge sums on severance packages - a mistake from which too many organizations, including the Wall Street firms again reducing headcounts, did not learn after significant initial layoffs in 2008 and 2009.

For fear of employee backlash, Human Resource professionals in many major corporations are loathe to revisit, much less modify, severance plans despite significant overspending when separating employees. Although there exist no federal mandates in the United States requiring severance be given to departing employees, companies feel obligated to hand out money to employees whose jobs disappear. The role of severance, once meant to bridge the financial gap between job loss and reemployment, is now to appease potentially angry people by giving them money.

Getting back to basics. Putting workers back on the job. Requiring accountability not only from workers but also from the unemployed seeking reemployment. Reversing the idea that severance is an entitlement and reminding human resource professionals that severance is a benefit, something that should change and evolve with an organization's evolving culture. Our constantly changing economic and employment landscape demand organizations examine what it means to provide a benefit to an employee. Employee backlash over a changed separation benefits package rarely occurs because it is not the law that an employer give out severance awards. Employers must understand that failure to examine and modify separation benefit packages does little to help support the goal of cost cutting at a time when it matters the most.

The jobs bill is only the first step in fixing how businesses spend money on employees. Putting in place benefits programs that streamline spending while supporting the goals of the employers and the employee comes next. Utilizing funding sources from the government to support separation benefit payments and tailoring each benefit to the employee’s needs while out of work. Alternate separation benefits plans are designed to allow companies to get this done. Now if Congress can agree for five minutes and pass the jobs bill, businesses may well be on the way to recovery.