You have just received the bad news that your employer is letting you go, but rather than make any rash decisions, you should take a couple of days to think about your next steps before signing anything. Here, we give you some tips to negotiate your way to a severance package that works for you.
According to the Fair Labor Standards Acts (FLSA), severance packages are not always a legal requirement but even so, severance is now the norm, especially in larger companies and therefore is often negotiable.
“The emotional shock of a layoff can be devastating, so it’s helpful to try to make a game plan in advance.” Susan Adams - Forbes
Negotiating with your employer can be an arduous task, especially if you don’t have the skill set to do it. But have no fear! Here are 5 top tips to help you talk your employer into giving you the best severance deal:
Preparation
Look at the severance on offer and what goals you want to achieve. Collect all of the evidence to support why you are asking to negotiate a better deal as proof of how it could be beneficial for all parties involved. It’s harder to argue with facts and figures.
Interpersonal Skills
Being able to maintain good working relationships under stress, having patience and being able to persuade others without using manipulation will promote a positive environment during a tough negotiation meeting.
Problem Solving
Look at all sides of the argument. Instead of focusing on the ultimate goal, focus on the best way to suit everyone’s needs so a compromise can be met.
Trustworthy, Ethical and Reliable
Both parties involved in negotiating must trust that the other party will follow through on promises and agreements after the meeting. Do track records set precedence for this? If not, a third party may need to be present to witness negotiations.
Leverage
Is it possible that you have a case for discrimination, wrongful or unfair dismissal? Get some legal advice. Even if you do have a claim, it can sometimes be more costly and stressful to pursue through the courts, therefore weigh up if it is more beneficial for you to use any evidence of a potential claim as leverage for further bargaining of your severance deal.
So now, what do you really need to negotiate in your severance package?
The Payment
A payment will be made, usually calculated in line with years of continuous service alongside any accrued but unused annual leave and travel mileage (if applicable). There’s no harm in trying to negotiate a higher payout, especially if you have been an integral part of the company for a number of years. Make a personal plea and explain how this lay off is going to affect you.
Medical Insurance
Health insurance premiums can be extremely expensive for you to pay yourself. It’s worth asking whether your organization can continue to pay their share of the costs for the whole duration or at least some of the period in which you are searching for another job. If you are spreading out the costs of your severance as a salary continuation, it would be easy for the organization to keep up the insurance payments within that on a monthly basis.
Bonus
If your job is subject to bonus payments either commission based or an annual lump sum based on performance, ask your employer for a prorated share for the year you were laid off.
Outplacement
With over 70% of US companies using an outplacement service to help employees find work, it’s beneficial to both the employer and employee. Employees receive additional support enabling them to secure another role 2x faster than without outplacement, employers will be happier knowing severance costs could also finish 2x quicker.
Also read:
5 Key Benefits of Outplacement
How To Use Outplacement if You're Laid Off
Company Property
A laptop, cellphone or company car could be negotiable to keep free of charge depending on how old the items are and whether they would be of use to another employee; or you could ask to purchase the property at a discounted rate.
Reference
As a lot of Companies now opt for giving the bare minimum reference info (just job title and dates of employment), ask your supervisor for a detailed reference letter help you in securing another post, especially if your employment termination was not part of a large lay off scenario.
Every severance package is different and so are every individual’s personal needs, therefore it is down to you to do your homework on what severance package your company offers, preparing you in advance of a lay off.
Further Reading: The Essential Guide To Outplacement
