Negotiating a Better Severance Package

Don't just accept a pink slip. Learn how to improve your parting perks.

September 9, 2008, 6:15 PM

March 5, 2009 — -- When my friend Natasha was laid off from her administrative assistant job just before Thanksgiving, she didn't take it lying down.

Along with her pink slip, Natasha was offered two weeks' severance pay -- provided that she signed a confidentiality agreement. Although Natasha had only been with the company six months, she jumped at the opportunity to make a play for some extra pay.

"I said, 'If I do sign this, would you consider giving me four weeks' severance instead of two?'" Natasha told me.

"Normally that's not my thing to have the cojones to say, 'Give me more money.' But I figured, What the hell? I'm getting let go anyway."

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Happily, Natasha's boss took the bait and gave her the two weeks' extra pay.

Every layoff is different: Not all companies have the cash to keep you afloat for a couple of months, let alone a couple of weeks. And not all employees have the clout or seniority to qualify for those coveted parting perks.

Let's assume that your company offers -- and your role commands -- some semblance of severance compensation. How do you ensure you get the best possible deal if you suddenly find yourself downsized?

Though you may feel like ranting and raving upon losing your job, now's the time for putting on your poker face and staying professional, pleasant even.

Most career coaches and employment attorneys will advise you to negotiate any severance package you're offered before signing on the dotted line. Not necessarily on the spot like my pal Natasha did, but after you've taken a day to read the paperwork you're handed, play with your calculator and talk it over with the rest of your household.

Then back you go to your boss or HR, armed with phrases like "I'd like to discuss some of the specifics of this package," "Is there any flexibility on this?" and "Would you be willing to give me X?"

Some experts caution that trying to negotiate with your employer like this constitutes a rejection of their severance offer, which in extreme cases could lead to them retracting it altogether. But most experts say that they've never actually seen this happen.

"In general, companies don't make emotional reactions -- employees do," said Jason Stern of, an independent lawyer in New York who's specialized in severance negotiations for 15 years.

Remember, your employer has a vested legal interest in getting you to sign those severance papers.

"It gives them closure," Stern said. "They know that they'll never hear from you again down the road."

In other words, to make you go quietly into the night, they're sometimes willing to deal.

So what should you negotiate?

Anything you can think of, recommended Connie Thanasoulis-Cerrachio, a former Fortune 500 recruiter who co-founded, a career coaching firm serving young professionals in New York.

"The departure date is often negotiable," Thanasoulis-Cerrachio said, especially if you can convince your boss to keep you on long enough to wrap up a pressing project that's beneficial to the company (that is, one you're uniquely qualified to do). Or, suggested Thanasoulis-Cerrachio, you could offer to see the project through as a consultant, for a project fee.

If you're someone who rarely calls in sick or takes personal days and you have a good relationship with your boss, you can leverage that, too.

"Ask them to throw in a couple of weeks of pay based on the employee that you were," Thanasoulis-Cerrachio said.

Just be sure to get any changes to your severance agreement in writing, or all your smooth-talking could be for naught.

Asking for several extra paychecks or an extension of your paid health insurance or retirement benefits isn't your only option. In fact, unless you're at the top tier of management, asking for non-cash items could get you further.

If you're a telecommuter, "sometimes you can negotiate a full office -- the chair, the desk, the fax machine, the laptop," said executive coach Rich Gee from Stamford, Conn.

If the laptop's a few years old, there's a decent chance a larger company won't want it back, Gee said. Besides, he said, "companies don't want to be in the moving business" -- they just want an easy resolution to a messy situation.

Another suggestion from Gee: If you've been offered several months of subsidized health insurance but don't need it because you're on a spouse's or domestic partner's plan, you've just found another bargaining chip. Offer to trade the free health insurance for the free office equipment (or whatever else you'd like).

Not at the top of the career food chain? Not to worry. There are still some things you can negotiate.

"If the company provides outplacement services for X number of weeks, increasing that by two to three weeks may not make a major difference in their processes but may be a huge benefit for you," said Darcy Eikenberg, a career coach in Atlanta.

You can also ask for extended access to company office equipment (computer and printer in a communal office area, copiers in a reception area) to help with your job search, she said.

Consider asking for a recommendation letter on your way out, too, said Jeffrey Gordon, a professional contract negotiator from Raleigh, N.C. If your company has a policy that prohibits employees from giving recommendations in writing (some do), ask what they will say about you if called by a future prospective employer and see if you can get that in writing, Gordon suggested.

Some clauses in your severance agreement can come back to haunt you later.

"The most important thing is to never under any circumstance sign something that says that you're resigning," said Stern, the severance attorney.

You may think you're saving face by calling a layoff a resignation. But in doing so, you give up your right to collect unemployment, he explained. Besides, there's no shame in losing your job when such a high percentage of the workforce is in the same boat.

But don't stop there. No matter what HR promises you verbally, Stern suggested getting it in writing that your employer won't contest any unemployment benefits you claim, which he warns, is "something that happens every single day."

Then there are non-compete clauses that prevent you from working from your employer's competitors for a certain period of time and, unfortunately, are common in many industries. Although many HR professionals and employment attorneys say non-competes are tough to enforce, why chance it? In some cases, the mere existence of a non-compete can scare away a future employer. So it is definitely something to negotiate away, if at all possible.

If you feel paralyzed or confused about any of these clauses or any other aspect of your severance agreement, consider a consultation with a career coach or an employment attorney who comes recommended.

You may still be employed now, but it's never too soon to look into your company's severance policy, just in case.

"Most mid- and larger-sized companies today are brushing up their severance plans and have this information posted or available by asking your HR person," said Eikenberg, the Atlanta career coach. If not, see what information you can dig up by talking with the coworkers you trust, past or present.

And if you find yourself of the losing end of a pink slip, remember that a little sugar goes a long way.

"I've had to lay people off, and it's a miserable experience," said Thanasoulis-Cerrachio of "I think managers feel so bad having to lay people off that they'll do whatever they can, especially if the employee is up front and remains positive."

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Michelle Goodman is a freelance journalist, author and former cubicle dweller. Her books — "My So-Called Freelance Life: How to Survive and Thrive as a Creative Professional for Hire" and "The Anti 9-to-5 Guide: Practical Career Advice for Women Who Think Outside the Cube" -- offer an irreverent take on the traditional career guide. More tips on career change, flex work and the freelance life can be found on her blog,

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