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How to Negotiate a Severance Package
In 2004, after working over 11 years for my employer, I was told that my position was being eliminated. This, of course, was quite a devastating shock and my immediate concern was loss of income and health benefits, as well as vacation time that I had worked hard to earn.
While employers are not required to offer severance packages to terminated staff, it is common practice among large firms and well-established organizations. Offering severance packages helps to ease the transition for all parties involved, and diminishes risk for the business of potential backlash related to the lay offs. Severance packages are typically offered to exiting staff holding mid-management level positions or higher.
Due to the sensitive emotional state that many employees find themselves in during this time, most will take a severance offer at face value, grateful to claim any aid that may carry them through the days and weeks ahead. Make sure that you clearly understand your offer, and all of its stipulations, before acceptance. Most severance offers provide a designated time frame in which acceptance must be made. This can span anywhere from a few weeks to a few days. By establishing a deadline, this enables the company to control the duration of the process and allows them to bring closure to a difficult situation rapidly. So pay attention to the details and act fast so you can meet their specified deadline.
Employers will usually low-ball their initial severance offer, hoping that the employee will accept it graciously and move on. However, it is in your best interest to take the full amount of time provided to review your severance offer in detail. You have a right to enter negotiations with the company if you feel what they are offering is unfair or inappropriate considering the circumstances. While evaluating the severance package, you should consider: major contributions that you've made during your tenure; ways that you've bettered the organization or saved them money; your level of loyalty and commitment to the job; performance reviews, special achievements, career longevity and overall responsibilities. Maximize upon any opportunities that may help better your offer.
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