The dynamics of a company's relationship with a potential employee can be likened to a marriage. There is a period of courtship, future plans, and eventually, a formal agreement. Just as in marriage, it is prudent to have certain arrangements in place in case things don't work out. Career coaches and employment lawyers suggest that preparing for a potential layoff can be similar to anticipating a possible divorce. They also emphasize that the best time to negotiate a severance package is when least expected – typically when receiving a new job offer.
Tessa White, a career adviser, likens negotiating a severance package to a prenuptial agreement, emphasizing that the best time to secure favorable terms is when the employer is most enthusiastic about hiring the candidate. This sentiment is echoed by others in the industry, suggesting that many job seekers overlook the opportunity to negotiate a better severance package when accepting a new role. This is especially important for senior employees with unique skill sets or those required to sign noncompete agreements, where severance entitlement should mirror the terms of the noncompete agreement.
Even workers below the executive level can negotiate potential severance, particularly those with an annual salary exceeding $75,000. Though negotiating a severance package at the time of being laid off can be challenging, experts underline that it is not impossible. While companies are not legally obligated to offer severance, individuals have the opportunity to negotiate for more favorable terms, especially if they have leverage or potential legal grounds.
In the case of mass layoffs or severe corporate restructuring, the flexibility to negotiate severance may be limited. However, in targeted reduction scenarios or under circumstances where legal complaints could be made, there may be room for negotiation. Despite the challenges, a layoff can also present an opportunity for individuals to reassess their skills and position themselves for future career negotiations.