#CareerAdvice : How to Negotiate a Better Severance Package If You Are Being Laid Off. A Severance Package can be Negotiated. Understand your Options and Focus On What Matters Most to You. A MUst REad for All!

/in /by

Once your employer has given you a termination notice, the chances are your tenure is over. Although there are a few exceptions, it would be difficult to save your job. “I’ve represented probably 10,000 people who have lost their jobs,” says Wayne Outten, the founding partner and chair of Outten and Golden LLP, an employee-side law firm. “The number of people where the company reversed their decision and unfired them is extremely rare.” 

Although you might be overwhelmed, the most important thing to do right now is to focus on negotiating the best terms you can and to be aware of all the options available as part of a severance package. Don’t waste time passively waiting for things to happen to you. This is an opportunity to negotiate something that is fair and equitable for both you and your employer.

“Negotiating a severance package is a difficult moment in everyone’s life, but it can be an opportunity to carve out an agreement that everyone benefits from, and it can be the next step in somebody’s career,” says career coach Paolo Gallo. “It’s not necessarily a funeral.”

Determine what is most important to you and ask for it.

Think about your goals and the employer’s needs, and where the two align. “An organization has the duty to listen to what is important to people, and people have the duty to find out what’s important to the organization, and then find a compromise,” says Mr. Gallo.

If you have considered starting your own consulting business, for example, you could negotiate an arrangement that allows you to stay on as a consultant while pursuing other opportunities. “As an HR director I signed dozens of these kinds of agreements,” says Mr. Gallo. This can help a company to decrease its staff and benefits costs, while retaining your services and institutional knowledge. At the same time, your association with the company can help you attract new clients while you set up shop.

Like this Article?  Share It!    You now can easily enjoy/follow/share Today our Award-Winning Articles/Blogs with Now Over 2.5 Million Growing Participates Worldwide in our various Social Media formats below:

LinkedIn: https://www.linkedin.com/in/chris-g-laughter-b46389198/

Twitter: Follow us @ firstsunllc

Best Daily Choice: Follow the Best of FSC Career Articles/Blogs @

https://twitter.com/search?q=bestoffscblog&src=typeahead_click

Question: Want the ‘the best/current articles/blogs on the web’ on Job Search, Resume, Advancing/Changing your Career, or simply Managing People?

Answer: Simply go to our FSC Career Blog below & Type(#Jobsearch, #Resume, or #Networking) in Blog Search:  https://www.firstsun.com/fsc-career-blog/

What Skill Sets Do You have to be ‘Sharpened’ ?

Article continued …

If you need time to find a job and don’t want to be unemployed while looking, you can request that your severance be paid out in installments over a period of time and that your name stays on your employer’s website until you find your next job. The vesting period on your 401(k) is the amount of time you must work for your company before you gain access to its payments to your plan. Your payments, on the other hand, vest immediately. If your plan hasn’t fully vested, you can ask your employer to pay you the difference between the full and vested balances, or you can request to delay your termination date until it vests. You can also ask your employer to cover your health-insurance costs until you find a new job.

“Don’t think about how much money you can squeeze out of the organization,” says Mr. Gallo. “Think about what else might be important to you.”

What you can negotiate in a severance package:

  • More money. You can ask for more money, although you should keep in mind the amount is often tied to how long you have been working for your employer.
  • How the severance is paid. You could request that it be paid out in installments so that you continue to get paid regularly while you look for your next job. Or if you are worried about the company’s future performance, you can request one lump sum.
  • Remaining tied to the organization. You may ask to stay on as a paid contractor while pursuing other opportunities in lieu of taking the severance.
  • Retirement plan contributions. You could request that the employer pays you the unvested amount of your retirement plan, or if you are close to fully vesting, you can ask to move your termination date until that happens.
  • Stock options. Unlike 401(k) plans and defined-benefit pension contributions, which are regulated by the Employee Retirement Income Security Act and the Internal Revenue Service, you can request to accelerate the vesting period of your stock options or to have them continue to vest after you leave.
  • Health insurance. If you are concerned about health-care costs, you could ask your employer to cover your health insurance until you find your next opportunity.
  • References. You could include a clause in your package that stipulates how your employer will describe your period of employment if asked for references about you.
  • Outplacement services. You can request access to services, such as career coaching, training or help with your resume and cover letter until you find your next role.
Check your contract or employee handbook—and the law.

While companies are usually not legally required to provide severance pay, some employers do, and they have policies for how it works. Read through your contract or employee handbook to make sure your employer is following its policy. If there is a discrepancy, point it out during your negotiation.

Keep in mind that employers usually pay severance benefits only after the employee signs a release not to bring claims against the company, so it may make sense to consult with an employment attorney if you have any concerns.

Negotiate with the person who has the power and inclination to help you.

In negotiating your severance package, it is important to take stock of how long you have been with your employer, what your position is within the organization and what your contributions have been. Severance pay is usually reserved for salaried employees, and those who have served the longest reap the greatest reward.

However, don’t underestimate the three P’s in this equation: power, personality and politics. In particular, you should aim to negotiate with someone who has the authority and the willingness to help you. “Talk to the right people,” says Don Wylie, a managing partner at the recruiting firm Lucas Group. “Sit down with those people that have been your mentors, your allies.” Describe why the package is inadequate, and point to everything you contributed to the company during your tenure. If you can quantify your contributions—such as saving the company a lot of money due to an innovation you contributed to, or the additional sales you brought in as a result of you winning an important client—even better. When companies lay off a large group of employees, they sometimes swipe with a broad brush and forget about the individual contributions that you have made.

Don’t hesitate to explain your personal situation if necessary. “As a general rule, nobody wants to see another human being suffer,” says Mr. Wylie. “Look at your personal financial situation and how that’s going to strain. If you don’t ask and you don’t explain, obviously you’re not going to get anything.”

Resources
  • Excerpt on Severance Negotiation.This excerpt from Wayne Outten’s book covers many of the legal and strategic aspects of severance negotiation.
  • The Compass and the Radar. In this book, Paolo Gallo offers practical tools as well as insights on the trade-offs and difficult choices everyone needs to make at some point in their careers.
What to read next

WSJ.com | December 16, 2020 | Deborah Acosta