American Employees: Cheap to Fire


Interesting graphic from the Economist on what it costs to sack long-term employees. As shown, costs vary enormously across the world. America and New Zealand are among the most company-friendly countries, requiring no penalties or payouts to fire a full-time employee of 20 years or more. By contrast, a business in Zimbabwe must shell out well over eight years’ worth of pay to sack a worker. But companies in Venezuela and Bolivia are even more tied down—workers there cannot be fired at all! Talk about tenure and making sure you hire the right person.

Even though US companies have no legal obligations to pay terminated workers, most normally pay out at least a few weeks of severance (just look at the fired CEO payouts). Further, unlike Zimbabwe and Indonesia, US companies provide Social Security contributions, 401(k) savings plan matching, a safe work environment and health care for employees. I also imagine there are many more higher paying jobs options available in the US than in countries like Indonesia, so comparing firing costs paints a very limited picture of a countries work culture. In the event you think countries with “un-fireable” employees have it better, just think of the benefits you get here and be glad you work in America (a sentiment probably not currently shared by workers in the financial industry whose companies went out of business leaving them with virtually nothing!)

Related Career Posts:
* Employee Impacts from the Financial Meltdown
* Preparing for a Layoff
* Results from 2008 IT Salary Survey
* Top ten myths about buying a franchise – Part 1

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[…] You are looking forward to the day they let you go with a severance package or constantly dream about the day you can tell your employer to “take this job and shove […]

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