There are many companies downsizing their staff for whatever reason and as an employee, you may feel as if you are walking that fine line of being laid off. Even a quick call to your employer’s office is enough to make you fearful of termination. Does this describe your current situation? If so, you can prepare yourself by considering how you will negotiate for a higher severance package, if the case arises.
A severance package consists of benefits and pay made to employees after employment termination or if the employee is going into retirement. Some of what you will receive in your severance package includes:
- Supplementary weeks of wages (this is generally based on the employee’s tenure)
- Paid for unused vacation time and sick time
- A lump sum amount for the lack of receiving proper notice of termination
- Medical benefits
- Dental benefits
- Life insurance
- Retirement benefits
- Stock options
- Assistance with locating a new job in or outside of the company
To reach an appropriate plan that is reasonable for you and your employer, answer these questions truthfully:
- How long have I been employed with this company?
- What value and benefits have I provided to this company? If you are in a quota-producing role, you can put a specific number on your contributions
- If I get laid off, will my position be terminated or will the company hire another person and pay them a lower salary?
- What is the time-frame associated with getting a new job in the current financial climate within my industry?
Armed with the right answers, you should be able to formulate a proposal for your severance package. For instances, if you worked at the company for more than 15 years and you have been an essential team member, the company places a higher value on your performance. In such case, you have given your time to the company and so, you might propose a year severance package. During this time, you will be able to collect a salary while looking for another job.
Once you have a good notion of the time it will take to find another job in the existing economy, you can then figure out how long you will need your severance pay. It could be a year, six months or as little as three months. Some employers will give you the entire salary for a specific time period. Other employers will only give a percentage of your salary for a specific time period. In some cases, you may receive the entire lump sum at the time of termination or retirement. Obviously, you should always request more weeks added to your severance pay instead of less. This gives you some cushioning; just in case, your job hunt takes longer than expected.
Write down the reasons why you are worthy of additional monetary cushion. With this in hand, you might be able to discuss a package with a longer period of time, full salary and full benefits.
The ideal Severance Package
Take the necessary steps to negotiate an appropriate deal for your particular situation. For instance, if your package includes fewer weeks, ask your employer to change it. If you don’t have the years of service to receive additional weeks, negotiate for paid health benefits as an alternative. Create an alternative that appeals to the employer. For instance, offer your expertise as a freelancer or consultant and show the company how you could save them money during the transitional period of losing your skill set and looking for a solution. If you feel that you are not being treated fairly by your employer, hire an attorney to negotiate on your behalf.
Have you ever had to negotiate a severance package?