Learn Steps for How to Negotiate a Severance Package
Before we cover how to negotiate a severance package, we should discuss just what a severance package is. A severance package is the pay and benefits that a company offers to an employee when they leave. This is often done when an employee is laid off or enters into retirement. These types of packages usually include the last pay check (if leaving before a pay date), payment of unused vacation or sick time, retirement benefits, continuation of insurance for a certain amount of time, and stock options (if available).
Some companies even offer help in finding another position or employment situation when an employee leaves. This includes either offering resume help or posting employment history and service to a temporary agency or employment services. Usually the service package may be apart of the paper work a new employee fills out when they have accepted the position, other times it may not be.
Negotiating a severance package is the important and most often overlooked aspect of accepting a position for a business or company. Most people won’t think about asking about the severance package, but it’s something that should be looked into before accepting a job.
How to Negotiate a Severance Package
Knowing how to negotiate a severance package is more than just asking if you can have one. It is very important to know and understand what your current company or a prospective company offers as part of a severance package. Sometimes the average worker - that is, the intern up to the middle management - doesn’t have an option for a severance package; there is no law that states a business or company must pay their employees an severance package when they leave. Again, this is the very reason employees should find out if their current or prospective company offers one.
The very first thing you should do to negotiate a severance package is to gather your information. As mentioned above, knowing what your employer offers, or doesn’t offer, will help you better understand what is being given in the event that you leave. Another thing is to understand your place within the company. A general rule of thumb is to give an employer two weeks notice before you leave, giving them the time to find a replacement for you. Depending on your position, you may need to train this new person, which may take time for your own work that needs to be completed.
If you’ve been with the company for a long time, say five years or longer, you may be able to get additional benefits. Point out your loyalty and competence in your position; just be sure that the facts stand up. You don’t want to say that you’ve worked long hours and got the job done when it isn’t true.
Make a checklist of the things you would like in the package, but don’t go overboard. Asking for things like an extension of health or dental insurance or help in finding another position or means of employment are okay; asking for a raise or a boat is not.
When you show up to negotiate with your manager or supervisor, don’t bring a lawyer or a friend with legal experience. Making threats of litigation sets a hostile tone; it is understandable that you would be a bit angry and upset if you have gotten laid off, but being hostile or aggressive will only look bad and reflect negatively on you.
Unless the company has shown a disregard for your rights as an employee, don’t take the above route.
When you have reached or received the severance package, don’t sign it right away. Ask if you can take the paperwork home and then read through it. If you have problems understanding it, ask someone who is bit more knowledgeable to help you. Then you can either agree or disagree on terms. Hopefully, you and your company can decide on appropriate measures and reach a conclusion that is beneficial to everyone.