By Severance Pay When Resigning
Severance pay is a common way for companies to offer financial support to employees whose jobs are being eliminated, especially when the company must fire a large number of people at once. It can also be offered to employees who are leaving voluntarily, as part of their overall compensation package and benefits. It is important to know what severance packages look like in your industry and how much to ask for.
Whether you’re a senior executive or an entry-level employee, knowing what to expect when it comes to severance packages can help you prepare for your next job search. The best way to ensure you’re not leaving money on the table is to negotiate your severance package before you leave. This is particularly important during a recession, when severance packages may be less generous than usual.
Companies don’t have to provide severance pay, but they usually do as a gesture of goodwill or in order to be competitive with their industries. Generally, severance packages offer one or two weeks of salary for every year you’ve worked at the company. You can often negotiate other perks, such as continued health insurance coverage or assistance finding a new job.
The amount you receive depends on many different factors, including how long you’ve worked for the company, how senior your position is, and whether you have valuable information that could be used by a competitor. It’s a complicated calculus that isn’t always straightforward, and you need to approach it strategically in order to get the most out of your severance package.
How Do I Ask For Severance Pay When Resigning?
Generally, your employer owes you nothing in exchange for your resignation except for legally required items, such as COBRA health insurance coverage, earned vacation time, and sick days. However, if your employer has made significant changes to your employment terms (e.g., significantly reducing your compensation, altering shift hours, or asking you to relocate), you might have a valid argument for constructive termination and be entitled to how to get severance pay.
In the current environment, a growing number of employers are offering severance packages to workers being let go because they don’t want to lose morale and brand equity. It’s a sign that they realize the value of hiring and keeping top talent, and they’re willing to invest in your career if it helps them keep their competitive edge.
Even in the best of times, it’s difficult for employees to feel confident negotiating their severance package. They fear damaging relationships or looking greedy, and they’re worried they won’t get anything at all. However, if you understand how to approach the negotiation in a strategic way, you can get what you deserve and still maintain those relationships. To learn more, read our full guide to severance pay and how to get it.
Before approaching your employer about severance pay, thoroughly review your employment contract, employee handbook, or any other relevant documents to understand if there are any provisions regarding severance pay upon resignation. Additionally, research your company’s policies on severance pay to know what to expect.