Tech & Work

Get a severance promise before accepting a job offer

The next time you're called in for a job interview, make sure that you're ready to discuss a good severance package by following these five steps.


It may seem bizarre, but given today’s job market instability more and more employees are wondering about future severance packages while interviewing for a job. After all, the days of working five years, 10 years, or more for a company are pretty much gone. Just look back over your own work history—it’s very likely that your employment tenure has gotten shorter over the past decade. It only takes that first layoff experience to make you think that you should have given more thought to severance compensation before you took the job to begin with.

A key point is not to be afraid to mention the issue during your next job interview—it’s not an automatic candidacy killer. You need to realize that job stability is an issue that hiring managers and employment services are also well aware of, and they understand it’s important to job hunters today.

So, just how do you go about getting a severance package deal when accepting the next job? Just follow these five steps as an outline:

Step 1: Take control and stay in control
A job interview isn’t a one-way conversation. Job hunters should also be interviewing the prospective employer and inquiring about more than just the job and its responsibilities. You need to use your interview time to assess the company, as well as your feelings about the role you’re being asked to play. A good prep tool is to create a list of questions, as outlined in this recent TechRepublic article, and tag on this question: What is your company’s severance policy?

Step 2: When to pop the question
At some point in the interview, the hiring manager will likely initiate a discussion about benefits. This is the perfect opportunity to ask the severance question, according to Myron Harmon, human resources vice president with AchieveGlobal, a global performance improvement consulting and training services company headquartered in Tampa, FL. As you’re already talking about health insurance, vacation days, and other policies, “It’s natural to segue from that to, ‘Do you have a severance policy?’” Harmon said.

The big mistake is chickening out and not asking the question when the opportunity arises.

“If you don’t ask, you’ll never get anything,” said Harmon. “You don’t know if they’ll give you what you want if you don’t ever ask for it.”

Step 3: The answer and your next move
There are basically two answers a company provides when asked about severance—they either don’t have a set policy or they do. However many organizations have formal severance plans that guarantee benefits upon termination, according to Craig N. Clive, a principal with Ellicott City, MD-based Baylights Compensation Consulting, LLC.

“Organizations should not take issue with your asking about severance before hire—unless they have something to hide,” Clive said.

In either case, there is negotiating room, though the outcome is dependent on a variety of issues, including the skills/talent you can offer, your negotiating abilities, and the company’s current economic outlook. And keep in mind that the initial severance package is just like an initial salary offer—few HR or hiring managers ever open the money discussion with their “final” offer.

Step 4: Having a successful negotiation
Obviously, if the company’s policy and compensation meets your expectations and needs, there’s no need to negotiate on this issue during the job interview process or take it into account in deciding on the job.

But, if for whatever reason—such as you know there is some risk relating to the job due to market conditions or corporate financial issues—you want to get a better severance package, you need to evaluate your skills value and also bone up on your negotiating skills.

Keep in mind that HR professionals negotiate job offers all the time, and they’re trained for it. You’re probably not as well versed in the fine art of getting what you want. That means you need to do your homework before the job interview.

Clearly, if you’re applying for an entry-level management position, it would be surprising that the company would negotiate a stellar severance package. If, however, you offer a rare skill or expertise, you have some power.

“If the company needs you because of your specific skills, if they’re counting on you to work on or head up a project that they expect to drive the company forward, you’re in a great position to negotiate severance on the front-end,” said Harmon. “If the company is expecting your work to provide a significant stream of income, they’ll talk terms with you, even if you’re not coming in at the executive level.”

Step 5: Know what you want ahead of time
In defining your own expectations, career experts advise that you always ask for more than you really want but keep it reasonable. This is true in any type of compensation negotiation.

A good rule of thumb when it comes to severance packages is that for every $10,000 (annually) that you earn, you can expect to be unemployed in the job market for a month. So if you’re making $80,000 a year, it could take you eight months to find a new position.

“At least a month should be the minimum—and that goes up, based on age, service with the employer, and the likelihood of finding suitable employment,” said Clive, adding, “at the managerial level, six months to one year is not out of line.”

If you don’t like the initial written offer, you should make a counter-offer. You don’t have to be demanding and make it a deal-breaker, but don’t be afraid to raise your concerns.

Say the job offer is for $80,000, and there’s no mention of severance. Experts advise going back to the company with this kind of response: “According to my research, the going rate for this position is closer to $84,000. Can you put in writing the four weeks’ severance that we discussed at my interview?” More salary and severance negotiation advice can be found in this previous TechRepublic article.

In initiating the severance discussion, experts stressed that you need to be professional and not worry that the talk will cost you the job. While a company may decline to amend the severance package, they won’t redraw the job offer if the negotiation is handled in a cordial and professional manner. You can also get insight from fellow TechRepublic members who are discussing the issue here.

Ultimately, said Harmon, it’s important to remember that companies always have to think about the bottom line—and job hunters should do the same in regard to their own economic future. If you don’t take responsibility for your own career path, you’re doing yourself a great disservice.

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