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Negotiating A Severance

business check
business check

The not so funny business of losing your job.

At Glassdoor.com, the site where people review their employers and reveal their pay, the number of reviews which include the words "layoff" and "severance" has doubled in six months. People are talking less about moving up or out of a company. They just want to keep the jobs they have.

Sun Microsystems is the company where "layoff" and "severance" are showing up the most in employee reviews on Glassdoor, like this one from someone purporting to be a "Technical Lead" in Santa Clara:

"Sun employees have endured unplanned layoffs three times a year for the past four years. In that length of time, Sun has retained approximately 45 thousand employees, had perhaps four thousand senior employees quit, and laid off about eleven thousand employees - often very quietly. This creates serious morale problems among employees who survive those layoffs. Anything positive I could say about Sun must be tempered with this layoff problem, always lurking in the background, always sapping the employee pride and enthusiasm that would normally produce the competitive edge that made Sun a successful company in the past."

Glassdoor says the "L" and "S" words are also showing up in higher numbers at Hewlett-Packard , Motorola , IBM , and EDS .

So, if you do find out you're losing your job, what do you do? Rusty Rueff, who used to run the HR departments at EA and Pepsico, is offering tips on negotiating the best separation package.

1. See if you can negotiate a "salary continuation" for a period of time instead of a lump sum severance payment. The company may not go for it, as a lump sum provides some accounting benefits, but it's worth a try. A continuing salary lets it appear that you are still employed while you take care of necessary business which requires proof of a job, "such as home refinancing".

2. Even if you don't negotiate a salary continuation, ask the company to maintain your employment status as "active" through the end of the severance pay period. "This helps make sure that anyone verifying employment gets a 'yes they are employed here' answer." Rueff also suggests that when you are finally terminated, you request that your "rehire" status be "yes" if someone asks.

3. Ask that your health and dental benefits be extended through the "equivalent termination date". In other words, if you're getting three months severance, ask that your benefits be extended three months. "This helps to reduce out-of-pocket costs and delays COBRA from starting the 18-month clock."

4. Ask to be considered for "project work" to come in and help out as needed.

Finally, and I would have never thought of this, ask to have continued access to on-site services and benefits, "such as company gym to preserve lifestyle and health (and keep expenses down)."

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