4 big trends in severance and separation benefits (2027 data)

 

Updated October 2026

Organizations expect more layoffs in the year ahead. They’re also changing how they support the people who leave.

LHH partnered with Censuswide to survey 600 HR and business leaders at US organizations with 500 or more employees. The 2027 LHH Severance and  Separation Benefits Benchmark Study shows how severance policies, outplacement programs, and decision-making have shifted since our last benchmark study in 2024.

Here are the four biggest trends.

1. Layoff expectations have doubled

69% of organizations expect layoffs in the next 12 months, up from 36% in 2024.

The view from the top is even sharper. 80% of CEOs expect layoffs, compared with 66% of HR leaders. Publicly traded organizations (77%) expect layoffs more than privately held ones (63%).

Layoffs are sometimes the only way to protect or grow a business. How an organization carries them out shapes its employer brand, its legal risk, and the trust of the people who stay. That makes severance and separation benefits a bigger priority than ever.

2. Severance is thinner, while outplacement is broader

In 2024, organizations were making severance packages more generous. That trend has reversed.

• 38% made their severance policy less generous, up from 9%
• 56% made their policy more generous, down from 76%
• 12% extend medical coverage through the full severance period, down from 52%

HR and business leaders tell the same story. 39% of HR leaders and 36% of business leaders say their policy became less generous.

At the same time, outplacement now reaches more people at every level:

• 79% offer outplacement to non-exempt employees, up from 58%
• 85% offer it to exempt employees, up from 61%

Organizations are also changing how they calculate severance. 40% now base it on a mix of age, length of service, job level, and ability to find new work, up from 22%. Only 1% give every employee the same flat number of weeks, down from 9%.

The result is severance that reaches further into the workforce but gives less at the top.

3. Support is more equal from the C-suite to the front line

Outplacement programs look more alike across job levels than they did two years ago.

• Comprehensive programs for CEOs fell from 63% to 43%
• Comprehensive programs for non-exempt employees rose from 32% to 38%
• Online-only programs for non-exempt employees dropped from 26% to 14%

The gap between CEOs and front-line employees shrank from 31 points to 5. With more people to support, organizations are spreading their separation budgets across the workforce instead of concentrating them at the top.

4. Finance has a bigger seat at the table

HR now leads outplacement decisions at 30% of organizations, down from 58% in 2024. CFOs and procurement teams lead at 31%, up from 8%.

With more separations ahead, finance teams want closer oversight of every separation dollar. HR and finance leaders who plan together can build programs that treat people fairly and fit the budget.

What changed since 2024

Our 2024 benchmark study found three big trends. Here’s how each one has shifted.

• More generous packages. In 2024, 70% of employers made severance more generous. In 2027, 38% made it less generous.
• More formal policies. In 2024, most organizations had written severance formulas. In 2027, more organizations tailor severance to each person’s situation instead of using a flat formula.
• Technology-driven outplacement. In 2024, half of organizations called technology the most important outplacement resource. In 2027, that fell to 32%. A blend of technology and in-person support now leads at 38%, up from 23%.

Digital tools help people move quickly. Coaches help them make good decisions about their next role. Organizations now see the value of both.

Frequently asked questions

How many companies offer severance?
92% of organizations pay severance, whether or not they have a formal policy, in line with 89% in 2024. Eligibility varies by job level. 70% offer severance to CEOs, down from about 9 in 10 in 2024. 51% offer it to non-exempt employees, up from 45%.

Are severance packages getting smaller?
Yes. 38% of organizations made their severance policy less generous in the last two years, up from 9% in 2024. Fewer organizations continue medical coverage through the full severance period.

How many companies offer outplacement?
At least 79% of organizations offer outplacement at every job level, from executives to non-exempt employees.

How do companies calculate severance?
40% base severance on a mix of age, length of service, job level, and ability to find new work. Fewer organizations use the same flat number of weeks for everyone.

Who decides on outplacement benefits?
Decision-making is shifting from HR to finance. HR leads at 30% of organizations, while CFOs and procurement lead at 31%.

See how your program compares

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About the research: Censuswide surveyed 600 US HR and business leaders at organizations with 500+ employees in September 2026. Comparisons to 2024 use responses from US HR leaders at organizations of the same size. The 2024 survey asked about severance policy changes over the previous three years. The 2027 survey asked about the previous two.