With the state of economic recovery still in question, many companies are actively structuring severance packages, meaning there’s potential for negotiation. This is great news for recently laid-off workers who may now have the power to negotiate better benefits prior to leaving a company.
Severance Packages and Negotiating Power
During the recession, many companies maintained their commitment to offering fair severance pay, while some even increased benefits. But what’s surprising is that even after being offered a severance package, laid-off workers are able to negotiate the following: More Pay: Many companies offer laid-off workers the equivalent of 1-2 weeks pay for each year worked; however, workers can always ask for more. Extension of health benefits: When negotiating, workers can ask for health benefits that extend beyond the severance term. Outplacement services: Some employees request that the company pay for outplacement services, which can help with resume building and interviewing skills. Exit Statement: By negotiating the exit statement, workers ensure that the layoff shows no fault to them and instead focuses on downsizing or other company loss as a reason for elimination.
Don’t Be Afraid to Negotiate Your Severance Package
A common fear associated with negotiating is that it will jeopardize any chance of receiving a severance package. However, companies traditionally do not pull their offers because a worker has attempted to negotiate, which means the worst that will likely happen is that the company will reintroduce its original offer. In addition to the possibility of increased severance packages and negotiation power, recently laid-off workers can enjoy a benefit in the stimulus bill that will help pay for Cobra health insurance. While this can’t make up for jobs lost, hopefully it can soften the blow a bit and add a little more to your savings account. Have you been let go, or are in the process of being laid off? How are you handling your severance package negotiations?
You’d be surprised how much employers are willing to up your severance if you just ask, assuming of course that you’ve had a long history of hard work and good performance reviews. It can’t hurt to ask, and you should figure that most people wouldn’t so your chances will be better. Good luck to everyone out there.
I got the axe from my company yesterday. I asked for a higher severance based on this article and my manager seemed happy that someone asked for a better package. I guess people that don’t ask might seem like they don’t believe they’re worth it and are happy with getting anything.
It’s my experience as an HR manager that usually when larger companies announce a round of layoffs, they have a set amount they’re going to offer that’s final. This is regardless of the person’s past performance. However, smaller and medium companies may offer a better chance at negotiating higher packages or benefits. Of course, as the article mentions, it never hurts to ask! Managers especially understand the hard times people are going through and will not look down on you for asking.