March 22, 2010

How to Say It: Getting severance

Filed under: How to Say It, Making money

Discussion: March 23, 2010 Ask The Headhunter Newsletter

A reader’s challenge:

My company is going to lay off some people. If I’m in the group, I’d like to ask for severance pay. How should I say it?

Okay, folks — how would you ask for money on your way out the door?

But let’s make this more interesting. It’s usually best to take care of something like this before it all hits the fan. So suppose there’s no layoff in the offing. But you want to protect yourself in case it happens. Do you have any leverage to get a severance agreement in place now for later? What do you tell your company to make it happen? How do you say it?

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9 Comments on “How to Say It: Getting severance”
By Louise Garver
March 23, 2010 at 7:51 am

This is a great question. I advise my clients to find out what the severance policy is at their company and what is standard in other companies. This will give them some leverage for internal consistency in asking for severance. Of course, it’s always a good idea to ask about this during negotiations before you start with a company and can get it in writing.

By Erika
March 23, 2010 at 8:15 am

I agree that severance should be negotiated at the offer. When you’re being walked out the door, you basically have no negotiating power.

By Don Harkness
March 23, 2010 at 9:34 am

Agreed very interesting topic.
negotating coming in could be ticklish, depending on where you are in the pecking order. Not a problem with executives as we all know from the very public discussion of their golden parachutes & departure packages bolted to them. But for mere mortals, a hiring manager and/or HR person could get put off by the question from someone they’d prefer to be a starry eyed newbie set to contribute to God and company for their life.
Better you do some networking and establish rapport with someone already employed who knows that company’s rules of engagement & can brief you on that point so you know going in what their policy is. One major company I worked for routinely published severence policy & severence algoriths on their intranet. There was no mystery.
Other than that, you have to consider who you are asking/negotating with & their position in the pecking order. When layoff rumors start flying, one’s boss with whom hopefully you’ve developed great rapport won’t be offended if you ask what kind of deal can be cut. Severence or layoff stalling tactics (buying more time). But if you’re boss is a 1st line mgr unempowered to negotiate anything out of the norm, don’t count on too much. In a major corporation normally layoff scenarios are cast in stone right down to the penny. So you need to be talking to someone very senior who is, or assumes empowered to make judgement calls.
Which leads me to Erika’s point..no negotiating power when you’re being cut loose. Don’t assume that, or what I said above leaves you helpless. Let me share my real experience. I worked for an F100 company & found myself in a position after numerous downsizing that in my gut I KNEW my number was up. It was if, but when. So I did some research and found a book..sorry the name escapes me..which basically discussed “how to be fired”. The gist of it was don’t be bashful, make a wish list of things you want…outside of whatever policy you think is place. I did and was pretty creative about it. creative but being a manager myself not ridiculous, reasonable in my view. fortunately I directly reported to a VP. Another point to consider about negotiating power..and the book pointed this out..no one likes to lay people off, fire them etc. It’s very unpleasant to normal people no matter how senior you are. You can learn how to do it, and cope with it, but you don’t like it. Your list helps them address a normal desire to do something to help you…personally help you. At that time, in my company it was not permissable to blow someone away by phone or email. Had to do it in person…with an ever-present HR person perched nearby observing. I presented my list. My boss declined a couple and gave me the rest of the stuff. So in addition to the SOP severence package, I wasn’t walked out the door immediately, I was entrusted to stick around for a couple of more weeks, retained my company phone #, email access, additional outplacement, and some other trivia I can’t recall, but the best and most imaginative was (because I didn’t have a home PC at the time) my entire workstation, a MAC, a supersized monitor, all software, etc (close 8-10K worth of gear at the time). My wife said I should have asked for my desk to put in on, but I forgot that detail. He just signed a blank property pass and gave it to me with the HR person present (who in truth I knew pretty well). And about 3 weeks later I packed up my 2 tons of office stuff and left with it.
So the sum of the long winded story..if you think you’re going to be laid off. and you’re in good stead..there’s no rule that says you can’t ask for special consideration…so lay out your own departure plan and wish list and ask. Highly probable no one else will think it through and do likewise, increasing your chances to gain approval. Further if this is a case where you’re involved in a 1st or 2nd layoff where the boss is personally suffering from executions, all the better. And if you are the boss and you’re laying someone off, you’ll find you are likewise empowered, particularly if you boldly don’t ask too many questions.
PS, having done this once, & unfortunately been laid off more than once, I repeated the process to a lesser degree and again, asked for my PC from my boss, who likewise waved a hand and wrote it off as it was relatively old and behind the times.

By G
March 23, 2010 at 10:11 am

Good point from Don: It can’t hurt to work out a reasonable plan and present it in a practical and unemotional way to the boss who is laying you off. You may get some of what you ask for, and the boss will be grateful to avoid any emotional scenes and to be able to feel like less of a heel.

But in a big company the compensation part of it will be set in stone by top management and the boss won’t be able to change it so try for other concessions as Don suggests.

I have often heard people recommend negotiating severance at hiring time but I think that is a fantasy for anyone making less than $200k (that is, almost everyone). So let me ask this: has anyone here ever tried it? How did it work out? What level was the job where it worked?

By Nick Corcodilos
March 23, 2010 at 6:37 pm

@Don: The reason that what you suggest works is, as you point out, because many employers would rather have you leave willingly and under some sort of mutual agreement. When they give you some of what you want, that establishes “terms” for your “separation.” My guess is that legally this gives them some protection, because something was “exchanged.” Because they gave you the stuff you asked for, you can never claim you left unwillingly. My compliments for leveraging this! See, folks? You can’t always get what you want, but you might get some of it if you ask!

My intent in publishing this “How to Say It” — I know it’s goofy to ask for something when you’re being ushered out the door. What leverage do you have? But that’s PRECISELY why you should ask! What’s to lose?

By Hank
March 24, 2010 at 4:31 pm

@G,

When I was interviewed for a large pharma director’s position, they were hurting to fill the position. I was to come in at a Director’s level and asked for severance in writing. I was told only VP’s and above get considered for severance but they would check it out. Indeed, they came back with 6 months severance offer. Turns out I declined the offer, but if they want you bad enough, they will bend the rules.

I agree it doesn’t hurt to ask at the end, but it’s much better to have it up front. It may even make them reconsider terminating your position.

By Don Harkness
March 24, 2010 at 5:25 pm

Nick, all. Nick is right on the legal aspect. In retrospect that was probably a factor. But my standard severance required me to sign my life away anyway, and if I could swap some legal comfort for more…glad to help.
And don’t forget to ask for a reference. As a manager in that company I knew via HR edict Manager’s couldn’t give references…you know any requests were to be referred to HR where they would provide name, rank and confirmation you were an employee. But I asked anyway, and learned a tip from my boss. While he couldn’t give a reference in his corporate capacity…he could give a personal reference and agreed to do so. works just as well.

By Nick Corcodilos
March 26, 2010 at 10:04 am

@Don: You raise two very important points. Severance deals don’t come without strings. Expect terms like, “I agree not to sue my employer for any reason and hereby release it from any liability blah blah blah.” You might have to sign a non-compete agreement to get the bucks. Read it carefully. In fact, have a lawyer read it. If it’s worth money to you, it’s worth a coupla hundred bucks of legal review.

The other point: references. Don’s right. Get references. But as he points out, many companies will not permit managers to give references for fear of litigation. “Oh, no! Somebody said the employee wasn’t so great! We’re gonna get sued!” Gimme a break. References are the coin of the realm and always will be. Managers may be prohibited, but most managers I’ve known will give them anyway. And a good headhunter will not disclose the reference or where it came from. Is that illegal? I don’t know and don’t care. (Throw the tomatoes.) If we cannot get honest opinions about people from other people then all commerce ends as we know it. Capitalism is based on faith and faith is based on our knowledge of other people – good and bad.

By Don Harkness
March 31, 2010 at 10:57 am

Nick good points. Given the boomers kicking around, some other aspects very likely to be present is age. I was over 55 when I “graduated” & if I recall there was a quid pro quo kicker in my package that was age sensitive, a few more weeks pay ….tied to agreeing not to sue for agism. (layoffs are an acquired skill for corporations..the more they do the better they get at it, whereas the employee may be facing their 1st and has zero experience). another thing some people may see is what I call a “stick around to finish a project and/or train replacement bonus” meaning the departure date is not immediate. Over all I’m not complaining as I had 16 years with that company, they were hard ball players, but ironically when dealing with personal employee strife they revealed their good side. What I valued is they honored my integrity. they didn’t walk me to the door, they trusted me. I had a lot of “stuff” in my office and I could not just walk out the door anyway.
Various company cultures and their experience of course differ in how they deal with layoffs. Some HR people and/or bosses will make it a point to make sure you are fully informed of everything coming to you and help you get it. Others it’s if you don’t ask, they won’t tell. And bosses can be woefully ignorant of policy, they rely on HR and assume that HR will handle the fine points.
Getting back to age 55. Even in this day & age one’s company may likely have retirement programs ranging from very good to about nothing. If someone in that age bracket fears a layoff they need to do their homework. Don’t assume your boss knows the rules, or even an HR weenie. Dig around. When I was severed, my package added up to almost a year, the months of which fed into the retirement time in grade algorithm, which was enough to set up a bridge into retirement. In sum. after my retirement ran out..I was “retired”. I easily qualified in that company.
2nd time, and knowing enough to be dangerous I did my homework and educated my boss on same. In short, this 2nd company, followed a common formula that to retire one must be 55 with 10 years contiguous time with the ccmpany (65 years). I found buried away in some documentation/& confirmed in our internal site that their was another rule. if your age, + time with the company = 65 or more you were also eligible. My gut feeling & being a manager myself, I believe if I didn’t ask, they wouldn’t have told. In fairness, and benefit of the doubt, they were in the process of being acquired and it was nothing but chaos in HR anyway. But…I got retired again..after my severence. So the 50+ers need to research this.
Then..this brings up the subject of bridging. that is, if you lack some piece of the algorithm, in any severence picture, the company can wave their magic wand and fill the void. So in this case. If you find you are 53 with 10 years with the company. They can choose to bridge you 2 years of age, treat you as 55 and voila! you meet the requirement.
Again. you can ask. Again they can deny. Bridging is not uncommon at the executive level, particularly with time with the company.
As to references..they more likely fear some manager won’t say bad things and get sued, but good things that perhaps could be construed as contradicting your termination, especially if coming from your former supervisor. But you’re right, only rarely have I ran across someone refusing a reference, nor have I refused to give one.

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