5 Tips for Negotiating Your Severance Package
You don’t get what you don’t ask for.
There’s no easy way to handle a layoff (although we do have a few tips to help you make a graceful exit). Soften the blow by negotiating your severance package.
The Skill Set: How to Negotiate Your Severance Package
1. Know where you stand
Respected career coach Pamela Weinberg advises that, while you don’t need to play hardball, you should keep in mind that it’s in your company’s best interest for you to walk away as satisfied as you possibly can be. While companies aren’t required to offer severance, check your employment contract and official company policy to find out exactly what you’re entitled to. Don’t be afraid to negotiate your severance package.
2. Wait for the dust to settle
Don’t bring up severance negotiations as soon as you get laid off. “You’ll likely be caught off guard,” says Pamela. “Take a day or two to process the news, calm down and seek professional counsel before going back to HR and your boss with a severance ‘wish list.’”
3. Call your lawyer
Pamela recommends having an employment attorney review your severance letter of agreement before you sign it. “Even if you decide not to negotiate your financial package, you may want to negotiate other things, like health insurance and references for your next job,” she explains.
4. Ask for it all
“You don’t get what you don’t ask for, so ask for it all,” says Pamela. Go in with the expectation that you won’t get everything you request, but you will get more than the original offer. Ask for X-months' salary based on how long you worked at the company. Pamela shared an often-used formula to calculate severance: Number of years at the company X Two weeks' pay = severance total. Request back pay for unused vacation days, plus a portion of the bonus you were expected to get at the end of the year. Request a written letter of recommendation and assurance that it will be upheld if a prospective employer calls for references, and ask for a written agreement that any non-compete clause in your original offer is moot.
5. Don’t say something you'll regret
It’s a sensitive, emotional time, but avoid saying anything you’ll regret. “Remember: relationships matter,” warns Pamela. “Bosses and HR folks are human beings—they’ll feel bad about laying you off, especially if your lay off is due to downsizing, as opposed to poor performance.” She suggests appealing directly to your boss if you've had a good relationship. They’ll be more likely to negotiate your package with you than, for example, an HR person you haven’t gotten to know well.