Did you just receive a severance package? Are you unsure what to do next? Let’s learn how to get more money from your severance. Severance is offered in different situations, but typically for the same reason, to avoid litigation. Severance is offered to employees that are being laid off/terminated, leaving mutually, or their position was eliminated. You have been provided a legal document that, if you sign, you will receive compensation and agree to not enter into litigation with the organization upon your departure.
Each situation is unique, however I encourage you to review the offer provided to see where you can negotiate. When negotiating how to get more money from your severance, it’s important to approach the process strategically and professionally. Here are some steps you can take to potentially increase the monetary value of your severance package:
Understanding Your Rights
Research and familiarize yourself with the labor laws, regulations, and company policies in your jurisdiction regarding severance packages. This knowledge will help you better understand what you are be entitled to. For example, it is within your rights to not sign the agreement right away, if they pressure you take note (as that could be helpful information should you hire an attorney). Typically, you have 21 days to accept the agreement. Once it’s signed, you have seven days to change your mind. Also take note of everything that is said to you in your exit conversation, as this may be useful in the future.
Review Your Employment Agreement
Carefully examine your employment agreement and any other relevant agreements you have with the company. Look for any provisions related to severance pay or benefits. These documents will serve as the foundation for negotiations. This will help provide parameters you can work within.
Assess Your Leverage
Evaluate your position within the company and your contributions to its success. Consider factors such as your length of service, performance, specialized skills, and the circumstances surrounding your departure. If you have strong leverage, it provides a stronger basis for negotiating a better severance package. Key point to keep in mind, that most companies who offer severance agreements are not required to. The laws can vary depending on the state.
Research Industry Standards
Investigate typical severance packages within your industry and position. This will help gauge what is considered reasonable and competitive. If you find that the company’s offer falls below industry standards, you can use this information to negotiate for a higher amount. Research will be important during this process, just as it has been in past processes for negotiating a job offer and asking for a promotion. You want to go into a negotiation educated.
Seek Legal Advice
Depending on the complexity of your situation, it may be beneficial to consult with an employment attorney or a legal professional experienced in labor laws. They can provide guidance on your rights, review your severance agreement, and offer strategies for negotiation. You can go with a local employment attorney or look online for a severance consultation. Ask the lawyer which state laws govern severance agreements and if specific stipulations exist regarding timing and payment amounts. Also, talk to the local recruitment agencies to determine how long it may take you to get a new job at the same level and salary to help set parameters.
Identify Potential Areas for Negotiation
Look for elements within the severance package that you may be able to negotiate. This could include the amount of severance pay, extended healthcare coverage, stock options, unused vacation pay, outplacement services, or the timing of payments. Also ask the reason you are terminated, this is another opportunity to negotiate. The company may claim, for example, you created a hostile work environment and feel it’s best to mutually separate. However, you have evidence of wrongdoing by the company and suspect this is retaliation. Bring this information to your attorney to ensure the correct strategy. If this is your situation, definitely seek out counsel and don’t try to negotiate this one on your own.
Prepare Your Case
Develop a well-structured argument to support your request for a higher severance package. Highlight your contributions to the company, your skills and expertise, and any unique value you bring. Use concrete examples to demonstrate your worth. If you are working with an attorney, follow their guidelines for the best outcome. If you negotiate on your own, with the tips on how to get more money from your severance, its more important than ever to prepare!
You are asking yourself what base severance package can I compare to when negotiating? Severance packages typically include your final pay through your last day, any earned accrued vacation time, any reimbursements and then a specified lump sum, such as 2 weeks of your salary. On average its 2 weeks for every year of service, but it is ultimately up to the company on what they want to offer. Which is why this is a great place for negotiations. By law, employers of a certain size must offer the opportunity to continue health care coverage under the company’s plan at the ex-employee’s expense, also known as COBRA.
Schedule a Meeting with HR
Request a meeting with the appropriate person or department responsible for handling severance packages. Present your case professionally. Focus on the additional value you bring to the table, and why you believe a higher package is warranted. If you hire an attorney, again follow their advice on how to get more money from your severance in your meeting. The HR and legal departments would prefer to not bring litigation to their organization if they can help it, so play that to your advantage as well.
Negotiate Professionally
Approach the negotiation process with a cooperative mindset. Remain calm, confident, composed, and listen attentively to the concerns and perspectives of the other party. Always maintain professionalism throughout the discussion, even if the negotiations become challenging. Professionalism and respect go a long way! Just remember you negotiated your way into the organization, so you can negotiate your way out. Your reactions are what people remember. Stay Classy!
Consider Non Monetary Benefits
If the company is unwilling to increase the monetary aspect of the severance package, explore the possibility of negotiating for other benefits that may be valuable to you. This could include extending your healthcare coverage, stock options, providing career counseling services, unemployment, or allowing you to keep company equipment. As with any negotiation, prepare for the response. Know what you are willing to walk away from.
In conclusion, we have learned there are many factors to consider on how to get more money from your severance should you choose to negotiate. Remember that each situation is unique, and there is no guarantee of success in negotiations. It’s crucial to weigh the potential benefits against the risks and make informed decisions based on your circumstances. Receiving a severance may be a lot to process. Some of you may have had long term plans to stay at this organization and advance your career. So take the time. Try to view this unsettling experience of being ‘let go’, as an opportunity to thrive. Make sure you get as much cash as you can to help support you while you explore the next opportunity!
