How to Negotiate a Severance Clause Upfront

Negotiating a severance clause upfront can ensure a comfortable out should your new job go badly.

Finding a job can be a difficult, drawn-out process, especially when there’s the need to negotiate your salary before accepting the position. During that salary negotiation process, though, you must keep in mind that no matter how rosy things look when getting a new job, no position lasts forever. It's just as important that you make whatever arrangements you can towards job severance as well. While an upfront severance negotiation may be unusual for anything but the highest of positions, anyone negotiating their salary and benefits package can include a severance clause in their contract.

Instructions

1. Read any available materials from the company’s HR department on existing severance policies to develop an idea of the minimum available at your employment level.

2. Determine the items you wish to include in your severance package before beginning the negotiation process. Keep the severance items realistic and in accordance with the actual worth of your position. The more unique and valuable the position that you’re filling within the company, the more likely you are to successfully negotiate a severance package.

3. Offer to base your severance on length of service with the company. This will reassure the HR representative that you’re not looking for a quick payout and intend to leave as soon as possible. If you’re basing severance on length, make certain that it’s a growing package with each year adding to its value, and also that the payout differs with a higher amount paid to you should the company lay you off rather than should you resign.

4. Offer a compromise with your severance negotiations that makes the idea more acceptable to the employer. Offer to waive any wrongful termination rights should you be laid off in return for the severance package. Also, offer to sign a non-disclosure, non-compete contract when you leave in return for the severance package as well.

5. Keep the severance package negotiations short. You don’t want to dwell on your leaving the company for too long when you’re still in the process of signing the paperwork to begin the job.

6. Have the agreement placed in writing immediately, but take the time to have it looked at by an attorney before signing to ensure that you’re actually getting what you negotiated for and aren’t giving up too much in return. Make any changes in the contract language necessary with your attorney’s help and then return it for agreement with the company. Sign the contract only when you’re sure of the language involved.

References

• Sales HQ; How to Negotiate Your Severance Package; Jacky Hayward; 2011
• Bargaineering:; How to Negotiate a Severance Package; Jim Wang; 2011
• Job: Then Things You Need to Know About Salary Negotiations