This negotiating mistake cost Dan $100,000
Don’t let this happen to you!
Dan gets the "opportunity of a lifetime."
Dan jumped at the chance to sign with a fast-growing company in Chicago. He didn't hesitate to leave his high-paying, secure job in Virginia because this opportunity offered a chance to earn equity, instead of just salary.
Dan uprooted his family, got settled, and soon became very busy keeping pace with the business flowing into this lucrative company.
But the opportunity soon soured
All went well until one of their competitors got some negative publicity. Soon, Dan's company was unfairly impacted by the fallout from the competitor's evil deeds. Growth stalled, and then the company went into free fall. Soon, they were awash in red ink.
Dan was let go after less than a year on the job.
The company president was dutifully sorry and said all the right things, but all he gave Dan was three weeks of severance, and a skimpy outplaceme
nt package. The president actually thought he was being generous to give Dan three weeks for less than one year’s service. Dan was in shock and didn’t protest as vigorously as he should have. It took a long time to land another job
Dan had been working hard at his new company, and hadn't paid attention to building a network in Chicago. He soon realized he knew almost no one outside his former company. Finding another job took over eight months, and the net loss to Dan was over one hundred thousand dollars. The nest egg he had worked so hard to build up was nearly depleted.
What's The Lesson?
Negotiate severance before you accept a position.
ARTICLE CONTINUES BELOW
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Mistakes in Salary Negotiations AND Job Search Methods can cost $$$.
Want to talk about your situation? Call us for a no-oblication conversation: 847-673-0339 OR send us an email.
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Does that make you feel uncomfortable?
If it does, you're not alone. Many people cringe when they hear this. But what's the alternative? You wind up like Dan. And it’s really not so painful to negotiate this when you do it right.
How do you negotiate severance?
Here's what we coached Dan to say when he got the next job offer:
Dan: Things seem to be going extremely well around here. I’m very impressed with what I’ve seen.
The Boss: Yes, this is really a great company. I’m sure you’ll love it here.
Dan: I’m very comfortable with my ability to perform, but let me ask you something. I don’t suppose you anticipate anything like a buyout, merger, or change in the industry that might put my job in danger, do you?
The Boss: No, of course not. I wouldn’t
worry about that for even a second. This company is solid as a rock.
worry about that for even a second. This company is solid as a rock.Dan: That’s what I figured. Then, I don’t suppose you would have any difficulty agreeing to severance in the unlikely event that the something unexpected happens to the company?
Dan then negotiated a package that included a minimum number of weeks of severance, a good outplacement package that included support staff, office space and phone, and an extension of his medical benefits.
What do you negotiate for?
A typical severance package includes one or two weeks' salary for every year of service, outplacement counseling, accrued vacation pay and extended medical coverage, among other benefits. Higher-level execs like Dan may be able to negotiate several months, especially in light of special circumstances like Dan moving halfway across the country to take this job.
Get it in writing!
As with most things in salary negotiations, I recommend getting a severance arrangement in writing. If the boss balks at putting this or other compensation matters in writing, you might say, “I know well meaning people can hear different things from the same conversation, and I certainly wouldn’t want to start this employment relationship on the wrong foot by having a misunderstanding about what we agreed to today.”
If the manager still refuses, send a letter summarizing your oral agreement. This letter can be enforced as a contract.
Worried about seeming desperate or ungrateful? Don't.
This is just being smart. Keep reminding yourself of the consequences to you and your family if the company runs into problems like Dan’s did.
Nov 20, 2016 by
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