Negotiating Severance: Four Items

From: Jack Chapman

More Money

In most situations, employers aren’t required to offer even two weeks’ notice (severance), though they generally won’t go below this unless you are terminated for cause.

Severance pay should be in addition to, not in lieu of, accrued vacation and personal time.

Generally speaking, the higher your rank, the more you can get.  Four weeks for each year of service is extremely generous; be joyful at three; an employer’s initial offer would probably be one or two.  At executive levels, the weeks-for-years formula isn’t as applicable.  Middle manag­ers should get three to four months’ salary, and high-level executives should look for nine months to a year.

A way to get more money yet not have a package that looks bigger than anyone else’s is to ask to delay your effective termination date.  Even if you never come into the office again, your official termination date can be put off a few weeks, which will add a few more weeks’ severance.

Bonuses and Commissions

Refer to the Watch out! paragraph in Chapter 7’s “Sales Compensation” section.  If you had the foresight to get “what commissions do I get paid if I’m no longer here” clear when you were hired, know exactly what’s due now. 

Whether or not you clarified this up front, you can still negotiate more now!  If you have deals that are cooking and won’t close without your tending, negotiate commissions you otherwise wouldn’t get, in exchange for helping the company to close or keep the accounts despite your transition.

Bonuses are another matter.  If there is a quarterly or annual trigger date for bonuses, and you’re let go before that date, the company has no obligation to pay you the bonus.  But you can ask!  And if you can’t get it all, maybe you can get some portion?

Letters of Recommendation

A nicely worded announcement praising your past contributions and expressing any company chagrin at having to let such a good employee go can help in your search.  Don’t worry too much about this, though; being fired doesn’t carry the stigma it used to.  Offer to give the company a letter for its editing, or ask to edit a letter given you by the company.

Now is the time to handle this, while the company is motivated to have a clean break; it would be harder to get a letter of reference later.

Job-Search Assistance: Outplacement

Most medium and large companies will pay for outplacement: job-search coaching and other ancillary job-search services.  You may need to educate a smaller company about this benefit.

An important thing to negotiate here is your right to choose the provider.  Don’t worry too much about the costs; once you have interviewed a few firms, the one you pick will be able to negotiate with your personnel office to provide the best possible services within their budget.

Here are some criteria for choosing an outplacement provider.  Choose a firm that will assign a personal counselor to work with you one on one.  Ideally, its contract should obligate the firm to stay with you until you find a job, even if it takes a year or more.  Ask to speak with the assigned counselor briefly to make sure the chemistry is right.  Make sure your counselor has three or more years’ experience doing this kind of work.  If you want advice about this, call me.  I can help you select a firm.  847-853-1046.

Here are some additional niceties.  A full outplacement contract will provide office, phone, message service, printing and mailing of résumés, and correspondence.  An outplacement firm will also have some research capabilities to help you find organizations that you’d like to work for.

If your parting ways is amicable, a job-search desk and phone and secretarial extras can be provided by your (former) company, too.  That could make outplacement counseling—the most important part—more affordable.

But be careful here; don’t choose outplacement providers because you think they have more contacts than you do.  Rather, evaluate and rely on their ability to help you make new contacts, i.e. to coach your self-presentation and networking well enough that appropriate hiring decision makers are eager to meet you.  The power to make people interested in meeting you is much better than hoping that some of the firm’s contacts will see you as a favor.

Jack Chapman is a nationally know job coach and seminar speaker specializing for the last 20 years in salary negotiations and job interviews.

For more information on Salary Negotiations, please visit: http://www.breakthrough-salaries.com/

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