Losing your job can be a difficult and traumatic experience; however, severance payments can soften the blow. If you are about to get laid off and want to make the most of your severance package, there are certain things you need to know.
What is a severance package?
A severance package is a lump sum of money that companies offer to employees who are being laid off for some reason, which could be an economic crisis or internal restructuring. The severance package can help ease the transition to a new job.
Know all the components of your severance package
The first step is to find out what, exactly, your severance package includes. Generally, a severance package will include a severance payment, which is a one-time payment, and severance payouts, which are payments made over a specific number of months or years. Depending on the company and industry you work in, severance packages may also include other perks, such as continued healthcare coverage or outplacement services.
Negotiate the severance package you want
If you don't like what's offered, negotiate. Don't be afraid to ask for more. The severance package you're offered is a negotiation point, and your employer may be willing to modify it to suit your needs.
What should you ask for in severance package negotiations?
When negotiating severance agreements, you should always have an idea of your worth. The severance package should reflect your experience and the value that you bring to the organization. You should also make sure that severance agreements and other documents are clear about what you will be receiving. Do not sign anything until you fully understand every detail.
If, for instance, you're offered a severance package that includes four months of severance payouts, you may want to ask for an additional two months. Or if the severance payment is lower than what you expect, you might ask for a higher payout each month.
Be reasonable in your negotiations and keep in mind that your employer is likely offering you the best severance package they can.
Negotiating severance packages can be difficult. Make sure you are aware of the standard severance package components and have a clear idea of what you want before sitting down to negotiate. With some good negotiating skills, you may be able to secure the severance package you need.