- Compensation is usually the first item considered. If you have an employment contract (which is rare), this is usually spelled out in detail. Otherwise you are typically at the mercy of your employer. Most employees are "at will" employees who can be terminated at any time with little or no notice or payment. Even so, most corporations have severance guidelines in place. These usually relate to number of years of prior employment and the grade/title level in the corporation. Many companies pay severance of one week for each year of prior service and some companies/industries pay one month of severance for each year of prior service. Senior executives frequently receive one year or more of severance if there is an employment agreement in place. As part of your negotiation with the company, try to obtain information on how others were handled and pervious exceptions that have been granted. Many large companies have guidelines that are published in employee handbooks. These facts will substantially strengthen your negotiating position.
- Insurance is the next item usually addressed. Companies with more than 20 employees will usually provide coverage under COBRA for the next 18 months. You will pay for this coverage at substantially higher rates than your subsidized corporate plan. However, you will have immediate and continuing coverage which is critical for most individuals. As a negotiating point, you might ask to remain under the company plan during the weeks or months of severance and stay on the company policy during that period. COBRA coverage would begin later and provide a longer overall period of coverage. Unfortunately your life and disability polices will usually cease with employment. You will have to address these needs on your own.
- Outplacement services may be provided from one of the major firms (LHH, Drake Beam, Right Management). These firms are terrific resources for assisting managers and executives in transition. The costs of these packages range from $5,000-50,000 depending on length and level of service offered. You may want to discuss these services with ACS before proceeding. If you do not plan to use them, you may be able to negotiate an additional cash payment in lieu of these services as part of your severance.
- Laptops, cell phones etc. are typically provided in your normal work environment and low cost purchase may be negotiated as part of your departure package.
- Continuing education programs in which you are enrolled or wish to enroll to get a new position are sometimes covered as well. A few companies will even provide access to advanced degrees.
- Relocation is not out if the question if you have been sent to a remote area. This is almost always covered if you are involved in an overseas assignment. Tax equalization following these assignments is also typically covered and should be discussed fully with a qualified tax accountant.
- Departure announcement and references may be critical for positioning you for your next position. You may wish to draft both of these and have the company use them to announce your departure. A satisfactory reference may be essential for your next job. Having these drafted and placed in your personnel file to be automatically used for all inquiries can be a terrific benefit in obtaining your next position.
- Termination verses resignation is an issue for you to consider. If there is a major (and public) downsizing, the market will understand your departure. However if there is simply not a fit between you and the company, you may wish to convert the termination to a mutually agreed resignation. This may impact the nature of the reference that the company will provide as well as how you can present yourself if the market. It is much better for a company to state that you were employed by the company from X to Y and departed on Y date as an employee in good standing than to state that you were employed by the company from X to Y and terminated (for cause) on Y date!
Career Transitions Workshop