The loss of a job can cause numerous complications. Even successful professionals often do not have enough savings to cover cost-of-living expenses for protracted periods. Professionals and their family members may rely on health insurance provided by an employer for necessary medical care.
When someone loses a job, their income ends. Their benefits usually end too. Individuals suddenly fired from their jobs may experience extreme financial hardship. A severance package can help lessen the negative impacts of job loss and help people during the transition to new employment opportunities.
When is the best time to negotiate a severance agreement?
Before signing layoff or termination paperwork
Workers often feel blindsided when a company informs them of their termination or inclusion in a layoff. They may follow all the instructions provided by management or human resources, including signing documents. Doing so without reviewing them first and negotiating matters related to severance packages can be a mistake.
Particularly in scenarios where the employee’s contract does not already include terms for a severance package, they need to negotiate before signing anything. Otherwise, they may lose what little leverage they have by completing the paperwork required by their employer to document the termination. Workers may need to ask for time to review those documents with their lawyer and put together a proposal for severance.
When negotiating employment terms
People can and do successfully negotiate severance packages immediately after learning about an upcoming termination. However, the best time to set terms for a severance package is usually during the onboarding process.
Companies may be more generous when hoping to lock in fresh talent. The worker has more leverage and can then establish clear terms so that they know what to expect if they lose their job or get laid off better.
Having help when negotiating a severance package or holding an employer accountable for refusing to uphold a severance agreement may make all the difference for workers during a difficult time. Severance pay is not guaranteed by law and is therefore dependent on contracts and negotiations. Workers who have someone advocating for them may be able to secure more favorable terms than those who try to handle the process on their own behalf.