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Negotiating Severance in an offer

Aide46·Nov 08, 2022

Has anyone successfully negotiated severance in an offer?

I recently received an offer after being laid off earlier in the year and have read that negotiating severance is possible. Overall I am happy with my compensation, though I plan to ask for a little higher and also would love to protect myself against a future potential layoff. How would I approach this conversation and what would be an appropriate amount to ask for in terms of pay and insurance?

Thank you in Advance! ☺️

Twanda19·Nov 09, 2022

I have never heard of negotiating severance in a contract before starting a new job. Following as I hope to be in this position soon as well.

Leang·Nov 09, 2022

I worked in HR/People/Talent for many years and can confirm that you can negotiate severance in an offer. It is most common among executive positions, receiving an offer when things are in flux (e.g. preparing for an upcoming exit that puts your role at risk in the near future), or if a key position on the leadership team is open (it's typical for a new leader to come and make changes to the team they inherit). How far you get with this negotiation is dependent upon how much leverage you have (like the examples I just shared). You could use what is going on in the market right now as leverage if there is a potential risk of getting laid off due to the company's financial situation. Glad you're asking this question. So many things can put on the negotiation table that a lot of people don't know about.

Aura77·Nov 10, 2022

@Leang really interesting insight. It makes sense that it would be more common among executive positions. Would it come across as weird/off-putting/irrelevant in lower levels? Like manager level or even senior level? You mentioned people don't even know to ask for so many things. Are there any more that you can share?

Leang·Nov 10, 2022

Glad you found it helpful @aura77. The answers to your questions are very nuanced and require more information. Happy to do a quick chat about it. Feel free to DM me if you would like to connect.

raehames·Nov 16, 2022

As @Leang mentioned, negotiating a severance package before you're hired is possible but not very typical for roles outside of the C-suite. However, regardless of level, having a pre-negotiated severance agreement won't necessarily save you from a layoff, it'll just put a clear price tag on it for the finance department to work with. There's also the chance that a pre-negotiated severance will end up leaving money on the table. (i.e. you negotiate for 12 weeks thinking it's a great package and then 18 months later, there's a mass layoff and everyone else is given 16 weeks!). The worst-case scenario is you try to negotiate a severance package and the hiring manager feels like you're already running towards the exit before Day 1 - so tread lightly on this one. The simplest solution would be to ask for *more than just a little higher* than the original offer and start a high-yield savings account as your own rainy-day insurance fund :)With that said, you CAN negotiate a severance package in the event of a layoff if your company's Severance Agreement is trying to get you to sign an NDA/release of liability/etc. From a financial perspective, the severance payout is seen as insurance against the cost of a lawsuit (which is honestly a huge PITA for everyone involved - try to avoid that at all costs!!) so there's some leeway to say you won't sign unless they include X weeks of pay, cover healthcare costs, etc. within reason. Ultimately, the best things you can do to protect yourself against a layoff are:- Do your due diligence on the company to make sure they are financially sound, and that they have a long-term roadmap for responsible growth.- Do great work - that's a no-brainer! - Don't be shy about amplifying your accomplishments and sharing quantifiable successes. Whether you're a Product Manager, Sales Rep, or the Team Shoe-Shiner, focus on how your role supports business growth and don't be afraid to toot your own horn every now and then! Best of luck and if you need any help with wording your negotiations, let me know - it's one of my favorite things to do! Best wishes,RaeCo-founder of a staffing tech platform, former agency leader, creative recruiter, and résumé coach