How to Negotiate Your Severance

Can I negotiate severance??

Should I negotiate severance?

How do I negotiate severance??

Yes, you can actually negotiate a severance. In most cases, yes, you can because you have nothing to lose.? That does not mean they have to negotiate with you, of course.

Remember you are in sales. Maybe you’re an SDR/BDR, Account Executive, or Vice President of Sales. It’s in your DNA. And it’s ok.

It does nt mean your company will, but you can and should try.?

First, if you need the severance to pay bills, eat, live, pay rent, and pay for your insurance. It’s ok to accept it as is. Also, please check with a lawyer in your state, as some things may differ.

Here are some tips to keep in mind, especially around your mindset:

1. Always read your original offer letter, and if you are in sales, specifically read your compensation plan.
2. Part of your job if you are going to do what is suggested below is to exhaust them through the conversation. It will exhaust you as well and you need to decide for yourself if what you see below is right for you. If not, that is 100% ok.
3. The severance letter is written by their lawyers to protect them 100%, always. No matter what they tell you. Which is also to your advantage. Since they are not in sales and come in with a selfish mentality, you can use that against them. Kinda like martial arts, using the opponent's momentum against them.
4. Severance letters are rarely rescinded like job offers. This is because of the “non-disparagement” clause. As a salesperson, keep this in your back pocket.
5. There will be a clause for someone in the document stating that you are not to discuss, disclose, or disparage the company, its officers, etc. It will be one-sided, meaning they are saying they can say anything they want about you.
6. They will use words and phrases like “fair, flexibility, sorry we have to do this.” to make themselves the victim and get you to feel guilty. This is similar to the prospect attempting to make the salesperson feel guilty when closing a deal.
7. No matter what they say, no matter what state, you are generally NOT legally obligated to sign anything. Please check with your state, of course.?
8. If your severance is a crappy offer, check to see what your state unemployment laws are.?
9. Keep in mind they are attempting to manipulate you and paying you to remain silent. The worse the package, the more this is the reason.?
10. Claiming that unused vacation is part of your severance may not be true. Even if allowed, they are not “doing you a favor”; they are manipulating you. Check with your state laws/ lawyer because some states require that they pay you for unpaid vacation. Severance is often different.
11. Insurance - Always ask for 90-180 days, even if they won’t pay you additional cash.?
12. When they hand you the offer/letter, say nothing for a very long time. Take deep breaths after you read it. Pause and look them in the eyes, and play the staring game. It makes them uncomfortable.?
13. Wait for them to speak first. Give them nothing when they ask a question other than, “I need to review this.
14. DO NOT say, “Thank you, I need to review this.”? Are you thankful? Really?
15. The deadline they request for you to sign is 100% arbitrary in most cases. Some states do require a minimum time to give someone before signing. Again, check with your state laws/ your lawyer, etc.?
16. They are giving you a deadline because they want to nip this in the bud. They want to “get it off their to-do list”, and if there are many people, they are trying to streamline.?
17. Yes, in some cases, they are trying to “hug you out the door”. This is good. If the severance is a few months and it may include health insurance. In these moments, we think you should accept this. 90+ days is often pretty good.
18. Always ask for an extra 48 hours. When they ask why, you simply say, “I need the time to process everything that is going on; it’s a bit emotional, you know?.” It is ok if they don’t give it.

Things to negotiate

1. Always ask for 6 months severance
2. Always ask for 6 months of insurance.?
3. Always ask for a letter of recommendation (you write it, they sign it)
4. Always ask that the non-disclosure/non-disparagement clause needs to be bi-directional.?

Now, in many cases, they will say no to everything. Your ace in the hole is the mutual non-disparagement agreement. Remember, they put it in there to protect their reputation. Well, now, their is reputation is worth a whole lot more than the package they are offering you.?

As I stated above, if you need the money to live, it is ok to accept it. And again, check the employment laws in your state.

Here’s one thing to know. Severance packages are rarely “rescinded,” unlike job offers.?And it may happen; you need to consider all things.

With all of this in mind, when you start to negotiate, here are the things to consider saying.

You - “I appreciate you taking the time to create this package, and I’d like to share some thoughts if that’s ok?”

Them - “Of course.”

You - “Well, the severance package you offer does not feel fair. Fair would be 6 months pay as well as 6 months insurance. Additionally, the non-disparage agreement must be mutual. And I feel a letter of recommendation and LinkedIn endorsement would be the fairest.” (Use the word must)

Them - “Well, we feel this is fair, and it’s all we will offer. And the non-disparagement agreement is there, so you understand how serious and important it is for us to support you with this package.”

You - “Thank you, I am confused, the following deals are in the pipeline and set to close; I put them there, I qualified them, and they will close because of my work specifically. That commission is worth $$$____, which is more than your severance package.? How would you call this fair?"

Them - “Well, you haven't closed them."

You - "Exactly, so if I were here and they closed, it would be my commission, no?"

Them - "Yes, it would be yours."

You - "Ok, then you are letting me go to save from paying me commissions?"

Them - "I appreciate what you are asking this is the decision we have made, and it is in line with your employment letter ." or "Well, this is what your comp plan says, ” or something similar. You will notice them starting to squirm; this is good for you.?

You - “Ok, well, then back to the non-disparagement part.? Essentially, what you are doing is attempting to bribe, manipulate, and buy off my silence, right??

I mean, I respect your need and want to protect the company. I'd like you to keep this in mind. Well, I to have a reputation to protect. Essentially, I am my own LLC, and I am confused about how you feel your need to protect your company's reputation is greater than my need to protect my reputation. Can you help me understand, please?

Them - “Uhhh, well, um….” They will now be uncomfortable. NOBODY has ever said this to them, so they are 100% not even close to being prepared to answer with any sense of logic; most likely, they will be fake angry with you. In a few instances, they may actually “threaten you,” which could become another thing for you to use later, but we are not recommending that.

You - “Uh, I am confused; you seem frustrated. I am confused by this; I mean, you hired me to be a salesperson and handle negotiations; It seems as if you are surprised by this conversation. Your lawyers wrote this, your executive team reviewed and approved it, and it seems like nobody has thought through all the possibilities. I understand you are being told this is in the company's best interest. Well, what I am suggesting is in my best interest of me. How is this any different??

Them - “Uhh, umm… Well, this is blah blah blah.”

?You - “Well, I am a bit disappointed and shocked. You seem to be angry with me for doing exactly what you are doing.? Again, how is that fair?"

You - Pause, wait, take 3 deep breaths, yes 3, you will need them. If they speak while you are breathing, continue breathing.?

By now, they will be pretty exhausted. However, the conversation may continue, its ok to let that happen if you want.

At some point, you will need to get here;

You - Ok, well, the way I see it, you have the following options:

1. You increase the severance package and change the non-disparagement agreement and give me a letter of recommendation and LinkedIn endorsement. Don't worry; I will write them and we will be good to go. And remember, I am not going to say anything to anyone, ever.
2. You can keep the severance the same, change the non-disparagement and provide a letter of recommendation and LinkedIn endorsement, and of course, I will write them.
3. You can keep everything and pay for insurance for 6 months, and I will sign.
4. Nobody signs anything.

What would you like to do?

Yes, it's ok to negotiate to 5, 4, or 3 months. Yes, it’s ok to settle for just severance and no insurance. Yes, it’s ok to say no to severance and take insurance, which is cheaper for them. Yes, giving up the letters of recommendation and LinkedIn endorsements is okay. However, they should also be easy to give, something you can still be your immediate supervisor for later.?

Conclusion?

Yes, I have done this, and it worked to a certain degree. I could get the non-disparagement agreement changed and an extra 30 days of insurance.

Yes, I have given this advice to others, and certain portions also work for them.

Yes, I have given this advice, and someone tried and had to settle for the offer being provided.

As previously stated, check yourself and do what is best for you, your family, and your life. And again, always check your state employment laws before doing any of this.?

If you decide to go down this path, they would rarely rescind the offer. They are buying your silence, which is important to them.?

If you are not the type of person to do this, or its not in your fortitude to go through this, or you simply want to close this chapter and move on, I fully support this. You need to do what is best for you.?

Remember, we support you.

About the Author -?Richard Harris

Teaching sales reps how to earn the right to ask questions, which questions to ask, and when is the primary driver for Richard and The Harris Consulting Group. He brings 20+ years of experience, having done all the roles, SDR, AE, Manager, Director, VP of Sales, and Director of Sales Ops to the table.

His client list includes Fortune brands and start-ups, including Zoom, Salesforce, Human Interest, Dusty Robotics, Gainsight, and more. He's also the co-founder of Surf and Sales, the host of the Surf and Sales Podcast, and his newest podcast, Sales Rants with Richard. He lives in Northern California with his wife, Cathy, sons, Riley and Bodhi, and two Cavapoos, Lola and Luna.