Fare well at farewell
Whether it’s called right-sizing, downsizing or simply a layoff, in today’s economy many careers end not with a retirement banquet but, rather, a request to stop by human resources, where you find out retirement will be starting early.
To borrow from Dylan Thomas, you don’t have to go gentle into that good night. Just as you bargain for perks before you take a job, you must put your negotiating skills to the test when you lose one. True, companies work hard to make severance packages equal. But it’s also true that some are more equal than others.
“Here’s what’s important: If you say nothing, that’s exactly what you’ll get,” says Frederick T. Golder, a Boston labor relations attorney who authored “Uncivil Rights: A Guide to Workers’ Rights” and teaches at the Massachusetts School of Law at Andover. “There are occasions when the employer will fatten the package or provide nonmonetary benefits.”
Here’s how to optimize a separation agreement.
Make it legal
Fear of a fight, particularly a legal one, is the best motivation for a company to make a departing employee happy, says Golder. Remember to be respectful, but let the human resources manager know you plan to have a lawyer look over your agreement.
“After, come back and say, ‘I’m concerned about this package. I’ve consulted a lawyer and I think under the circumstances,’ — say you’ve been working there 20 years and you’re now 55 years old — ‘I should be getting three weeks of pay for each year I’ve put in, not two weeks,'” says Golder.
Take a healthy outlook
One way to feel better about getting downsized is securing continued health coverage. In fact, extending your medical benefits as long as possible should be a central issue in your severance negotiation strategy. Many companies will let you keep your coverage until you qualify for Medicare or find a new job with benefits.
At minimum, ask the company if they’ll keep you on the insurance plan for four more months, says Jean Tobin Zawlocki, a human resources consultant and author of “Help! My Company’s Going Out of Business, What Do I Do Now?”
Ask about training tracks
Getting downsized when you already qualify for retirement benefits is one thing. But if you’re too young for an AARP card, much less Social Security, you in all likelihood will need to polish your professional skills. Companies often will offer re-training assistance to downsized employees. But your best chance for success is to track down the course, the degree or the certificate you’ll need to get your next job, says Golder. Then, go into the HR department with the specifics and ask your employer to pay, he says.
Check the fringe
Many companies offer outplacement services to help with things such as managing your finances. If you feel well versed in the subject, ask about taking the cash value instead, advises Golder. It’s liable to be in the thousands.
Ask for other noncash benefits, like continuing your corporate gym membership. “Anything that will cost little or nothing to them but that’s valuable to you is something worth trying to keep,” says Golder.
“No two situations are the same,” says Zawlocki. “But make sure whatever your company agrees to give is put in writing.”
You’ll negotiate a better severance package if you first analyze what is behind it. Perhaps the company is trying to downsize its headcount, then farm out the work to consultants or part-timers. Offer to stay on in those capacities. Even if you’ll be looking for a new job, that process is always easier when you already have one. Under this arrangement, you’d likely cut yourself off from the severance pay the second you find a new, steady paycheck. That’s not such a bad compromise.