Even With a Great Job Offer,
Be Sure to Negotiate Severance

By Joann S. Lublin

Wall Street Journal, May 1, 2001

CONGRATULATIONS! You just landed a fantastic job offer. Terrific title. Terrific salary. Terrific boss. But you're probably missing something: terrific severance in case things don't work out.

Bad move. The best time to win the best departure deal is before you even accept a position, employment specialists advise.

Most people figure severance isn't negotiable at the outset. When a small New York advertising agency hired Shanelle Rein as its communications director in July 1999, she failed to request an exit package. "It seemed like such a great offer from a company promising such great things that I didn't think about severance," the 29-year-old Brooklyn resident recalls.

On March 7, the ailing start-up laid off Ms. Rein and 14 other remaining staffers. Her severance arrangement? Two weeks' pay and a brief continuation of health insurance. The middle manager intends to insist on four weeks' pay as severance before she accepts a job at another company.

Never feel too desperate or too grateful to negotiate a generous departure deal upfront. You are particularly well positioned to do so if you have skills that are in high demand or other job offers, says Bill Coleman, compensation vice president for Salary.com, an online provider of pay data.

A typical severance package includes one or two weeks' salary for every year of service, outplacement counseling, accrued vacation pay and extended medical coverage, among other benefits.

TO WIN JOB-LOSS protection from the start, you need to make well-reasoned demands so you don't appear to lack confidence in your capabilities. Cite possible external events unrelated to your job performance, such as a corporate takeover or an industry slump.

Be sure to confirm severance arrangements in writing. If your hiring manager balks, send a letter describing your understanding of what he or she agreed to provide. The letter becomes an enforceable contract.

If you fail to obtain a written promise in advance, you should still bargain hard for a fair severance settlement after you've been laid off. "Employers do have an incentive to treat you decently because the employer wants to preserve the morale of the surviving work force," observes Richard Bayer, chief operating officer of the Five O'Clock Club, a national career-counseling organization based in New York.

During your exit negotiations, point to your recent notable achievements or job landmarks. You may have been let go, for example, just as you were completing a major sale that would have earned you a fat commission -- or right before the payment of your hefty annual bonus.

There's little risk of pressing too hard. After all, you have already lost your job. Among 15,000 termination cases handled by Stephen Mitchell Sack, a New York employment lawyer, only two businesses ever threatened to withdraw severance offers when his clients sought more, he says.

A knowledgeable attorney or career coach should review your employer's supposedly standard exit package. Compare the package against what the company has done in the past.

"Find whoever they treated the best ever and try to match that," suggests Peter DiGiammarino, a managing partner for IntelliVen in Tysons Corner, Va. The consulting concern offers, among other things, coaching to high-tech executives.

MAKE SURE YOUR employer also considers any unusual hiring circumstances when you negotiate an exit package after your job ends. One central Florida executive quit a job in early 1999 and uprooted his family to accept a post in the Midwest as marketing vice president for a midsize retailer. Less than two years later, he lost his $100,000-plus job following a corporate realignment. The company offered two months' pay as severance.

Officials told him, "Legally, we don't have to do anything for you. You ought to be pleased," the 41-year-old marketer recollects.

They were right, but he wasn't pleased. He fought back, protesting the initial severance deal offered because of the high price he and his family paid to join the company. He campaigned for a better package during four tense sessions over 72 hours with his boss and the human-resources chief.

The pair finally decided to give him salary, medical and dental coverage, office voice-mail service, and a company laptop for four months.

The dismissed executive couldn't persuade his employer to pay for outplacement assistance, however. Such trade-offs make sense as long as you snare what is personally critical. If you're already juggling some hot job prospects, for example, you may prefer extra cash over other things.

A trade-off worked well for Mary Gorman of Summit, N.J. The veteran human-resources manager left a big New York spirits manufacturer last fall when her post seemed sure to vanish soon. She reduced her outplacement aid request to four months from six in exchange for a year of more customized coaching through the Five O'Clock Club.

"I wanted to try counseling from two different places," explains Ms. Gorman, 41. So far, she finds both useful. "But I don't have a job yet."

Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved.