Severance packages are pay and services offered to laid-off employees, usually reserved for managerial positions. Negotiating a package requires remaining calm, researching previous packages, not signing agreements until a satisfactory package is offered, and asking for more than necessary to allow for concessions.
A severance package is a combination of pay and services sometimes offered to workers who are laid off from a job. These packages are usually reserved for employees at managerial level and above, although most companies are under no legal obligation to pay severance unless specified in the initial employment contract. Negotiating a severance package can be a difficult and frustrating time, almost akin to drafting a divorce settlement. Understanding the basic tips for negotiating a severance package can help employees get the best deal from their former employers.
An important tip for negotiating a severance package is to remain calm and professional. Losing a job is an emotionally upsetting experience that can cause feelings of anger, bitterness and great anxiety about the future. It’s important to prioritize goals right away; it’s often more important to try to get a decent severance package than it is to vent justified feelings of anger and frustration against a former boss. Start the negotiation process without hostility, as it may be in the employee’s best interest to prevent their employers from immediately becoming defensive.
Try talking to other former employees to determine their strategies and whether they received a severance package. Negotiating a severance package can be made considerably easier if an employee has an idea of what previous packages might have been like. Some companies may require employees to sign a contract that they will not disclose severance details, but even knowing that such a contract exists can be helpful. Knowing that the company has paid compensation in the past may suggest that it is a possibility in the current situation.
Companies often want things from departing employees that can be used as leverage in negotiating a severance package. Some might ask an employee to agree to sign a document that indicates he or she will not try to bring customers into a new business, or that he or she will not work with direct competition for a certain period of time. Do not sign any agreements until a satisfactory severance package has been offered, agreed upon and signed. If employers are afraid of losing business because of a departing employee, it is in their best interest to appease their compensation claims.
Some people may be tempted to accept an extremely small severance package or suggest only a minimal package for fear of appearing hostile. While it’s important to make reasonable demands, remember the basic rule of barter: asking for more than is strictly necessary allows a smart negotiator to make small concessions without losing important battles. In addition to salary and benefit requests, consider adding other requests, such as ongoing discounts for merchandise, gym memberships, or other perks.
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