As companies plan for the new year, many are anticipating layoffs. However, a number of companies may part with employees without providing severance pay, according to WorldatWork and Aon Consulting.

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With nearly 500 major organizations surveyed by WorldatWork and Aon Consulting, results show that 28 percent of companies are planning layoffs in 2006, while 26 percent are unsure if reductions in force will be necessary. Meanwhile, of all the employers surveyed, 30 percent don't have a formal severance plan in place.

"The job market is more volatile than ever, with the competition for top talent extremely fierce," said WorldatWork President Anne Ruddy. "To attract and retain the best employees, companies need to offer key rewards like severance plans, which may be a make-or-break deal for those employees."

In addition, this study reveals that of those employers offering a severance plan, 85 percent use the number of years served as the basis for determining the amount of severance provided to employees. Nearly one-third of companies (32 percent) offer one week's salary per year of service, while approximately a quarter of employers (23 percent) provide two weeks of pay for every year served. Other factors considered in determining severance include an employee's position (23 percent) and compensation (20 percent).

Few Companies Review Severance Plans

Annual reviews of non-executive severance plans are rare, according to this study. In fact, 63 percent of organizations have not reviewed their severance plans in at least the last 12 months. Specifically, for 22 percent of employers, a severance plan review has not occurred during the past 12 to 24 months. For 29 percent of companies, it has been more than 24 months since they examined their severance plans, while 12 percent of organizations have never reviewed their plans.

Of those that do assess their severance plans on a regular basis, 61 percent report making no changes to their plans during the most recent review, while 11 percent decreased the pay provided and another 11 percent increased the pay opportunity.

"Change is the norm in today's corporate environment, so companies should review their severance plans at least annually, to ensure alignment with their current business objectives," said Pete Lupo, senior vice president with Aon Consulting. "For example, we're beginning to see an increase in merger and acquisition activity. M&As require significant focus from employees, whether these workers are asked to complete the terms of the transaction or remain steadfast in their traditional job requirements. It would be difficult for employees to accomplish their goals without knowing what it ultimately means for them. In this type of situation, a well-developed and well-communicated severance plan is essential."

About WorldatWork

WorldatWork is the world's leading not-for-profit professional association dedicated to knowledge leadership in compensation, benefits and total rewards. Founded in 1955, WorldatWork focuses on human resources disciplines associated with attracting, retaining and motivating employees. Besides serving as the membership association of the professions, the WorldatWork family of organizations provides education, certification (Certified Compensation Professional - CCP®, Certified Benefits Professional -- CBPTM and Global Remuneration Professional - GRP®), publications, knowledge resources, surveys, conferences, research and networking. WorldatWork Society of Certified Professionals and Alliance for Work-Life Progress (AWLP) are part of the WorldatWork family.

About Aon

Aon Corporation (NYSE: AOC) ( http://www.aon.com/ ) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. There are 47,000 employees working in Aon's 500 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.

Aon Consulting is among the top global human resources consulting firms, with 2004 revenues of $1.247 billion and 7,000 professionals in 120 offices throughout the world. Aon Consulting delivers integrated consulting solutions to help clients with employee benefits, human resources outsourcing, compensation, communication and management consulting.

This press release contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. Potential factors that could impact results include: general economic conditions in different countries in which we do business around the world, changes in global equity and fixed income markets that could affect the return on invested assets, fluctuations in exchange and interest rates that could influence revenue and expense, rating agency actions that could affect our ability to borrow funds, funding of our various pension plans, changes in the competitive environment, our ability to implement restructuring initiatives and other initiatives intended to yield cost savings, our ability to implement the stock repurchase program, changes in commercial property and casualty markets and commercial premium rates that could impact revenues, changes in revenues and earnings due to the elimination of contingent commissions, other uncertainties surrounding a new compensation model, the impact of investigations brought by state attorneys general, state insurance regulators, federal prosecutors, and federal regulators, the impact of class actions and individual lawsuits including client class actions, securities class actions, derivative actions, and ERISA class actions, the cost of resolution of other contingent liabilities and loss contingencies, and the difference in ultimate paid claims in our underwriting companies from actuarial estimates. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, is contained in the Company's filings with the Securities and Exchange Commission.

  Contacts:

  Jeffrey J. Kros, Esq.                    Joe Micucci
  WorldatWork                              Aon Consulting
  480-922-2027                             312-381-4786
  jkros@worldatwork.org                    joe_micucci@aon.com

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SOURCE: Aon Corporation; WorldatWork

CONTACT: Jeffrey J. Kros, Esq. of WorldatWork, +1-480-922-2027, or
jkros@worldatwork.org ; or Joe Micucci of Aon Consulting, +1-312-381-4786, or
joe_micucci@aon.com

Web site: http://www.aon.com/