The following story is not my brother in-law’s personal experience, but still somewhat typical in the workplace.
George didn’t see it coming. It was Friday afternoon when he was called into the boss’s office and told, “Business has been bad, and we hate to do this, but we’re going to have to let you go. We have arranged to give you good references and two weeks’ wages. We wish we could do more, but we just can’t. We wish you the very best of luck.
George got dizzy and went into “pink slip shock.” He could have at least tried to negotiate a better severance, but he was feeling disoriented as he just went home to break the news to his wife.
Pink slip shock can cost you thousands of dollars. If you’re in this situation, give yourself time to think and negotiate. Say, “Well this is sudden, and it puts me in very difficult circumstances. Let me take what you’ve said home and think about it, and I’ll talk to you again when I’m not in shock.”
If you think being fired is difficult for you, know that it’s difficult for your employer too. No one actually likes letting people go, and if you keep your head about you, you can benefit from their discomfort and guilt.
I call this article “don’t let go when you’re let go,” because most people do just that — they accept it and leave. Oh, they may get angry, they may threaten to sue or “go postal,” but after the initial flurry of anger, they usually let go.
Now, I don’t advocate the other extreme, either. Threatening to sue and writing your congressman usually won’t help much. If you give yourself some breathing room, you’ll be able to take a rational approach to negotiating severance.
Here are four things to consider.
First, you should always ask for more severance pay. Some norms are: one to two weeks pay for each year with the company; mid-level executives can ask for up to six months; top executives can expect packages of considerable size. Accrued vacation and other benefits already owed to you are important to spell out in a severance situation.
Second, you should ask for some job-search assistance. This is called “outplacement.” The “placement” part of the word is not helpful because outplacement firms don’t “place” anyone. They are job search counselors and can help you find a new job quicker than you will on your own. Full executive outplacement programs can run 10%-15% of annual earnings. The low end includes a few group job search training seminars and help with your resume.
Third, you should look for any “value added” activities you can do for the company for which you can be compensated for. If you are in sales and have some accounts pending, you can negotiate for the commissions on those if you help transition the accounts. If you are in the middle of a project that could impact the company’s bottom line, perhaps they’ll give you extra severance for completing portions of it before you leave.
Lastly, negotiate for a good letter of recommendation and references. If your boss truly respects you and your work, you can ask him to specifically recommend you to others in the industry. A letter from him to his friends is more powerful than a resume from you.
The key to all this is to take some time to discuss and negotiate the terms of severance. You can’t do that the day you get a pink slip. But you can be calm enough to not accept the severance right away. Tell them you want to think about it, and you’ll be back. The extra time and reflection will add up to a much more comfortable financial picture for you in the long run.