Severance Pay For Job Loss - Practical Solution - YouTube

Employees Worldwide at the most vulnerable and  insecure moment due to coverage 19 Recession  

worldwide, Salary cuts, job loss retrenching  pink slips terminations etc Is there an answer or  

solution to this? Can you make your employees more  secure? watch this video for the complete solution  

to all the problems. Hi friends this is Nixon  D'Silva and welcome to my channel "Nixon's Take"  

The objective of this channel is to take up  important issues that matters to most of us and in  

this episode we are taking up the issue of Fight  for Corporate Justice for all employees worldwide  

this is a Just Fight for employees where they  are not exploited at their workplace and their  

financial security is not compromised  especially when they lose their jobs.  

Having said that at the same time it is definitely  not a fight to armtwist the employers but it is to  

work in perfect sink or shoulder to shoulder for  the mutual benefits of both the employees and the  

employers. In this episode i am going to talk  about severance pay compensation to employees  

or unemployment allowance for all those who have  lost their jobs. It is also a fight for those who  

may lose their jobs in future and to make sure  that their financial issues and compensation  

is well taken care of to a large extent i will  explain how you can solve this problem to a large  

extent by solutions which are scientifically and  rationally thought out so please watch this entire  

episode till the very end to reduce or eliminate  your financial insecurity arising out of job  

and income loss. The solution chalked out are not  only relevant for all times but it is even more  

relevant especially in this Covid 19 scenario  where the entire world has gone into Recession,  

Retrenching, Downsizing of staff, Organizational  Restructuring etc Employees who lose their jobs  

are traumatized in most cases when there is no  income and there are Bills, Emi, House expenses,  

children's and parents responsibilities  other liabilities etc to take care of.  

If that employee gets a job soon then the damage  is not that much, but if it takes a long time  

and he has to wait and struggle for months and  sometimes even years then what will he or she do,  

many a time it leads to desperation and  in some cases even lead to commit suicide.  

since this solution is for employees one  might wonder or ask why not withdraw from  

the provident fund or from the retiral funds to  tide over the financial problems due to job loss,  

Well the answer is very simple, the retiral  funds as the name suggests are for the needs  

of the employee after his retirement but in most  cases he or she is no longer able to generate  

income like in their younger days further the  retirement corpus becomes meaningful or decent  

enough to take care of the retired person because  of the cumulative effect due to the employee share  

the employer share and interest that gets  compounded year after year so ideally speaking  

no employee should ever withdraw the retired  funds before his retirement as far as possible.  

so how can the impact of this financial problem be  reduced if not completely eliminated? Is there a  

solution to these problems? Friends the good  news is that, there's definitely a solution  

further to add to it the best part of the solution  is that there are absolutely no losers and every  

stakeholder is a winner I'm sure we can't  come out with a better solution than that.  

The best part of the solution given is that it  is A) Viable B) practical and C) Most importantly  

implementable. One of the primary or immediate  solutions to job loss is giving severance pay  

to all employees who have lost jobs in all cases  except unethical cheating and integrity issues  

i propose a six month severance pay  to employees who have lost their jobs  

and this is the bare minimum compensation  and employers are free to give  

Severance Pay much above this level as per  the company's affordability and profitability.  

employees otherwise individually are not in  a position or strength to fight or negotiate  

severance pay either at joining or while parting  ways with their employers. In short both employees  

and employers gain from the employee severance  pay or unemployment allowance scheme. Now the  

big question is how to generate and get  the big funds required for severance pay.  

Friends the good news is that this is very  much possible, practical and also viable  

After giving some thought on this I have come  up with the following sources for funding  

the employees severance pay or  unemployment allowance scheme.  

The first source of financing is from 1)  corporate social responsibility fund or CSR fund.  

Let us first understand what exactly this fund  is all about. CSR fund is a fund where companies  

are generally supposed to give or undertake  charity work upto an extent of two percent  

of the company's net profit. The percentage may  vary in different countries as per their laws  

or voluntarily as decided by corporates but  its objective is mainly to do charity at the  

corporate level for causes like uplifting poverty,  social work etc at the local or national level,  

I propose that one percent that is 50 percent of  the CSR fund be allocated for giving severance  

pay to those employees who have lost their jobs.  This is because just as charity begins at home  

every organization's first and foremost priority  responsibility and charity should first begin  

with their own employees especially this is so  because they are the primary and most important  

reasons for the company's profitability and  therefore before a company helps other people  

or organization they should first help their own  employees and then the other needy in the society  

I don't see any problems or objections from  corporates doing this to help their own employees  

because this does not cost them any additional  financial liabilities as the amount is already  

set aside because of either legal provisions or  voluntarily by corporates for CSR activities.  

The amount reserved for CSR activities runs in  billions of dollars for most countries having this  

social responsibility scheme and will go a long  way in helping employees who have lost their jobs.  

On a rough conservative estimate the CSR amount  at one percent of a company's net profit could  

be at least a mind boggling 150 billion dollars  which is surely a humongous amount to take care  

of the employees to a large extent who have lost  their jobs. The second source of funding is from  

companies share to Employees Severance  pay fund. The second and most important  

contribution will be by the corporates who  are employing the employees and their profits  

are largely due to the fact that employees are  working hard as a team with integrity, loyalty  

to get maximum profits for the employers, so it  is very important that corporates to make sure  

that their employees well-being are well taken  care of because the byproduct of this employee  

reform will be even more profits to them and a  very good work environment for all employees.  

To this end I want to suggest a nominal four  percent of the total employee's salaries and Wages  

expenses of the company to be kept aside for the  employees severance pay fund by the employer. This  

as mentioned is a nominal amount and therefore  the corporates will not have any objections to it.  

Let us see how significant or insignificant is  this four percent additional liability to the  

employers. A study and analysis had been done  of more than 2000 corporates with a mix cutting  

across all industries from manufacturing as well  as service industries fortune 500 companies as  

well as multinational companies, national and  international companies, profit making companies  

as well as loss-making companies, to get a  very good flavor and idea whether severance  

Pay is viable and practical to employers or not.  You will be pleasantly surprised at the results  

analysis we have come up with after the study,  which is completely in favor of severance pay or  

unemployment allowance for the following critical  reasons 1) employee expenses or salaries you won't  

believe are fortunately and surprisingly extremely  low and less than 10 percent of the turnover  

for all industries and companies 2) this  gets even better if you take manufacturing  

companies where employee expense or salaries  hardly five percent of the company turnover  

3) For service industry the employee expenses  about 15 percent overall 4) for loss making  

companies too, employee expense is about 10% 5)  For IT and software industry employee expenses is  

about 45 to 50 percent of the company turnover but  the profit margins are also much higher at about  

20 to 25 percent of turnover so there is enough  scope for employees severance pay provisions.  

In short a study concludes that there is more than  enough scope and band width for companies to have  

a provision of four percent of the total employee  expenses for severance pay which in actual terms  

taking the average employee expense of 10  percent means it is just about 0.25 percent  

as this will be taken as employee expense  in the income tax returns of the company's  

turnover. So it is really a very miniscule  expense liability of less than a quarter or  

one-fourth of just one percent and can be  easily absorbed by almost all corporates

The most important reason for introducing the  employee severance pay reform is because the whole  

business model is heavily skewed in favor of only  three stakeholders and living out the employees,  

this is because A) It is only employer-centric  as the main objectives are the company's  

profits B) Consumer-centric as they are to be  satisfied with the company product or service  

or they'll be out of business and C)  Government centric as they get their Dues  

and taxes. But the only stakeholder which gets a  raw deal and the wrong end of the stick are the  

company employees who are not only the main reason  of the company's profit but also most importantly  

take care of the interest of the other three  stakeholders and in the eventuality of losses  

or to increase company profits many a time they  are dropped by the employers like a hot potato  

and are terminated from the job. This is precisely  the reason why this anomaly has to be rectified  

by implementing the employee severance pay  reform to make sure that businesses are also  

employee-centric and all four stakeholders  interest is taken care of, which will only  

strengthen the whole business model and correct  the long overdue gap and will help businesses  

flourish even more than before. The government  should fully back this very important employee  

financial security reform which not only takes  care of the employees who have lost jobs but most  

importantly because the government too benefits  from severance pay to employees as they would  

also get various revenues in terms of income tax  and other indirect taxation out of the severance  

pay income which they would have otherwise  not got when there is no income to employees  

so the government in its own interest and without  batting an eyelid should make this an act on the  

similar lines of employees provident or pension  fund scheme or employees gratuity fund scheme  

and pass the resolution in parliament as  an employee's financial security reform.  

Friends does anyone have any doubt whether this  will be accepted and implemented by corporates.  

well the striaght answer to that is corporates  will definitely accept and implement the  

employee severance pay reform for multiple reasons  which I will now summarize. A) Because it is a  

just demand to compensate an employee who has  lost his job, hisincome and his livelihood . B)  

The additional financial liability to corporates  is not very high, in fact it is quite minuscule  

that is only about 0.25 or a quarter of one  percent of the total revenues or turnover  

and this financial liability can be easily  absorbed without affecting their business.  

C) This will definitely go a long way in  employee retention and this in turn will save the  

corporates a lot of money in employee retention  schemes and also replacement and training costs  

of employees for a little investment in  severance pay and the employer benefits  

far exceeds amount invested in severance pay  fund D) But finally the most important reason why  

they will implement this reform is because if  they don't implement it then there is a very  

high possibility of Customers/Clients/Employees  backlash of the corporates to Boycott the products  

and services of such companies which doesn't care  about their own employees and are insensitive  

to their pain and so does it implement  this financial compensation reform.  

Moreover most clients will also be employees  in some companies or the other. This boycott  

will surely hurt the corporates in a very big  way and even if the sales come down by just 15  

to 20 percent, losses will be tremendous and to  sustain the business operations might be very very  

difficult for many companies, further the clients  employees will reward those companies who are  

early implementers of this employee severance pay  reform so it is in their very own interest that  

the corporate should definitely implement this  new employee severance pay reform happily and at  

the earliest. As mentioned the best thing about  this solution is that there are absolutely no  

losers & all the stakeholders will be big winners  when it is implemented. Friends now to conclude I  

would like to mention that with the support of  each one of you, we will make this a reality  

and not only the current employees but all future  generation of employees as well will benefit from  

the implementation of the employee severance pay  reform or unemployment allowance reform by getting  

this very important clause as a compulsory part of  the employee agreement with the employers right at  

the very onset and start of joining the company  itself and they don't have to beg or be at the  

employer's mercy later because of the hire and  fire policies nowadays. We are also starting an  

"ONLINE PETITION" for clearance of this employee  severance pay reform or unemployment allowance  

reform shortly and will need maximum support  from each one of you by bringing an awareness  

of this reform to everyone around us so that our  voices are heard in the right corridors of power.  

So friends if you think severance pay or  unemployment allowance should be a compulsory  

employee reform to take care of employees  financial insecurities arising out of job loss  

and you want to see that this reform becomes  a real reality and you want to do your bit to  

support yourself and every employee for this just  cause and bring a change. Then please please like  

this video give your feedback of your views,  whether you agree or not in the comment section  

below which will only help all of us to pursue  this reform with even more grit and determination  

and share it as much as possible. Please don't  forget to subscribe to my channel "NIXON'S TAKE"  

and press the bell icon below to get  immediate notifications of my next video.  

Watch out for this space, thank you, very much for  patiently watching the video up to the very end.  

See you again in my next video, until  then this is Nixon signing off for now  

on behalf of everyone from team NIXON'S TAKE  Channel Goodbye and have a Nice day THANK YOU