Tips for negotiating severance
Prepare yourself in these uncertain economic times by learning how to negotiate a healthy severance package.
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Have you checked your company's severance policy lately, just to see? You might see that it is not what it used to be.
The human resource firm Hewitt Associates surveyed employers and found that nearly a tenth of them are on the verge of reducing severance cash payments and benefits to workers they are letting go. The HR firm Lee Hecht Harrison found that since the last recession in 2001, fewer companies offer severance policies in writing.
Connie Thanasoulis-Cerrachio is a former recruiter and co-founded the career-coaching firm, Six Figure Start. What should you do when you get terminated? She says, "People think they are powerless when they are laid off, when in fact there are so many things to do to control the situation.
- Remain positive
- Don't take it personally
- Keep anger at bay
"We tell individuals when you are in a situation where you are being downsized and you are actually in the termination meeting, there are specific dos and don'ts:
- Listen very carefully
- Take notes
- Understand the reasons for the termination
- Ask as many questions as you can
- Understand how the severance is calculated
- Ask for something in writing
- Schedule a follow-up meeting
In the follow-up meeting, Thanasoulis-Cerrachio says many things can be negotiated: cash-value items and non-cash-value items.
- Actual severance pay
- Bonus, vacation, sick time
- Lump sum payment versus salary continuation
- Outplacement services (to help find another job)
- Continuing employment as a consultant
- Departure date
- Retirement benefits
- Flexible spending accounts
Some companies are willing to make it look like you still work there even though you may not. This is often done to help workers refinance mortgages or to get access to a home equity line of credit to make the transition easier.
Employers will also extend employment dates to help freshly excised employees search for jobs with the positive "still employed" factor in place. Thanasoulis-Cerrachio also points to the tactic of offering to work a reduced number of days, or for a reduced salary, or both.
The most important thing, according to Thanasoulis-Cerrachio, is to not sign anything that says you are resigning because you won't be eligible for unemployment benefits.
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