Leadership Essentials: Severance
Severance Is More Than a Line Item, It’s a Moral Imperative
Losing a job isn’t just a storm—it’s a hurricane that uproots stability, confidence, and security all at once. But severance can be the lifeline that keeps employees afloat as they navigate the wreckage.
I’ve experienced it all: generous severance packages, bare-minimum offerings, and even situations where I had to fight for fairness. And here’s what I’ve learned: severance—or the lack of it—reveals a company’s true values. How an organization handles layoffs isn’t just a financial decision; it’s a moral one, with lasting impacts on the people affected and the company itself.
Why Stingy Severance Isn’t Just Unhelpful, It’s Harmful
Let’s be honest: a stingy severance isn’t just inadequate, it feels like a slap in the face. It sends the message, “Thanks for your work, but now you’re on your own.” For employees, this isn’t just harsh—it’s a betrayal of trust and a devaluation of their contributions.
In contrast, a fair severance isn’t just a financial cushion, it’s a statement of respect. It tells employees, “We value you and want to see you land on your feet.” This kind of support goes beyond dollars and cents. It’s deeply emotional, empowering people to face the future with dignity and confidence, knowing they can find the right role instead of scrambling for the first available paycheck.
The Impact of Severance on the Job Search Journey
A fair severance can change everything for someone entering the job market. When you’re not immediately worried about next month’s bills, you can approach job interviews with confidence, show up authentically, and take the time to find opportunities that align with your skills and values.
On the flip side, a meager severance forces many to prioritize survival over strategy. Instead of finding the right fit, they’re pressured to accept the first fit, and that’s not just bad for the employee, but for future employers, too. Candidates who are financially stable can be intentional, confident, and ready to contribute in meaningful ways.
Why Fair Severance Is Smart for Businesses
Fair severance isn’t just the right thing to do, it’s a strategic move. It sends a message to remaining employees that they’re valued, reinforcing morale and loyalty during uncertain times.
In today’s era of mass layoffs and heightened employee advocacy, how you treat your people when they leave can define your company’s reputation. The stories employees tell—on LinkedIn, Glassdoor, or even in casual conversations—shape how potential hires view your organization.
And let’s not forget: today’s laid-off employee could be tomorrow’s client, partner, or even a returning team member. Fair severance is a bridge that keeps connections positive, opening the door to future opportunities for both parties.
The True Test of a Company’s Values
In my career, I’ve experienced the full spectrum of severance packages. I’ve felt the relief of a generous offer, the frustration of a meager one, and the indignity of fighting for what was fair. These moments revealed a simple truth: how a company handles layoffs is a true test of its values.
For business leaders: severance isn’t just a line item on a budget—it’s a reflection of your commitment to your people. It’s a statement of your values, your culture, and how you define leadership.
For those navigating layoffs: you deserve a severance that not only respects your contributions but also gives you the stability and confidence to step forward.
It’s time to advocate for a corporate culture that treats severance as more than a financial transaction. Because at the end of the day, how we treat each other—especially in times of change—is what truly defines us.