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Monday, July 7, 2014

Severance negotiation tips

Negotiating for sevrance
Severance packages benefit corporate competitiveness
Severance packages are  financial benefits issued to employees following their employment with an organization. Moreover, sine employees are assets  per the San Antonio Business Journal, recognizing them as such upon termination helps clear up any employer obligations.

Severance pay is used to attain and retain employees in the case of pre-employment severance agreements. In terms of post employment severance, the agreements release companies of liability claims and sometimes places additional terms  within the severance contract. For example, when an employee maintains or enhances a company's capacity to generate revenue, then that employee has unique benefits to a company in addition to enhancing its tactical and strategic strength. Severance packages with no compete clauses help ensure that value is retained within a corporation and not lost to a competitor.

Leverage

Employees or contractors that provide corporations with definable value and benefits that are not necessarily easily obtained, or in reasonable demand have negotiating leverage. This leverage is the basis for negotiating a good severance package. According to the University of Illinois several underlying factors influence leverage; these include time, need, desire and competition. Properly assessing the presence of these factors is key to successful negotiation of a good severance package.

Preparation

Before negotiating a severance package determine what the employer is realistically capable of offering. This involves researching the industry, employment contracts within that industry and typical severance packages associated with the career in question. Following this write down a wish list and compare that against the research to evaluate how realistic those benefits are. Nancy Trejos of the Washington Post advises against attaining the services of a lawyer to assist with initial negotiation unless necessary. 

Timing

Human resource experts recommend negotiating a severance package before employment when leverage is often higher. However, Quintessential Careers, a career development advisory firm, suggests allowing some time to pass before making a salary pitch or accepting a job offer. It also recommends taking some time before rejecting an offer. Taking time to make decisions allows the benefits of rumination to produce insight into the possible career and negotiation options. Timing is also used as a negotiation tactic to build pressure and allow for counter offers.

Contract

A severance package is a legal contract. If it does not include the complete details of severance, the names of parties involved and the necessary signatures and dates, then it is invalid. Severance options will vary among individuals, types of employers and careers. Items such as severance pay, the length of time severance pay is afforded, and the amount of time required before becoming fully vested in a pension plan are often included in packages. According to Smart Money, even computer equipment and job search assistance are included in some severance packages.

Discourse

The negotiation discourse is what ties all the other variables together. This requires a combination of know how, poise, skill and linguistic agility; all of which culminate into an art that is improved with practice. Knowing that employers are not frequently mandated to offer severance packages is a good place to start because it grounds the negotiation in reality. Moreover, according to Nolo, severance pay in particular is only mandatory when legally implied or in some cases of mass layoff.

Image: Geralt/Pixabay, PD