A Theoretical Framework for Measuring The Value of Job Security with an Application to the Canadian Public Service

Abstract

AbstractShould job security be included in total compensation packages offered by public and private sector employers? Reliable sources differ considerably on the value of job security: recent studies done in the United States indicate that, in certain cases, job securitycan be worth as much as 25% of compensation, while the Treasury Board Secretariat indicates it represents at best 2 or 3% of the package. This paper proposes to obtain the value of job security by measuring the expected loss of compensation resulting from the lack ofit. A probabilistic model compatible with the level of compensation approach to total compensation is presented. It measures the loss of wages and other benefits (including pension) caused by involuntary terminations, layoffs, and lockouts.