How to Negotiate a Severance Package?
Did you know that in the US, severance packages have become more generous, with employers reviewing and improving their severance policies? In fact, a significant increase of 72% in severance package generosity was observed from 2020 to 2025.
A severance package is a collection of compensation and benefits that an employer may offer to an employee upon the termination of their employment, such as extended salary payments, continued health benefits, assistance with job placement, and favorable terms regarding non-compete or confidentiality agreements.
But can you negotiate a severance? Employers often present a standard offer, but there’s typically room for discussion to better align the package with your individual needs and circumstances.
The following steps will help you negotiate your severance according to your skills and company’s policy:
Understand Your Rights and Company Policies
When faced with a potential job loss, you need to know your legal rights and company policies. You can study your contract of employment and the employee handbook to know the severance payment policy of the company if it is in place.
Being aware of what you are entitled to in terms of notice period and payment for unused days of your vacation will empower you when it comes to negotiating.
Local labor laws may provide extra protection or legal restrictions. If you have questions about policies, contact your HR immediately. Document everything regarding your employment and communications about your possible job loss.
An employment lawyer offering a free consultation can also explain your rights and options. Your understanding of your rights and options will allow you to negotiate with assurance and clarity.
Assess Your Current Situation
Before entering negotiations, take a look at your current life situation. Analyze your financial need and calculate your expenses every month. This will help you figure out how long you can hold out without a paycheck. Losing a job may affect you emotionally too, so make sure you negotiate well and with reason.
Think about your performance and contributions at work. Are there any achievements justifying a better package?
You should also think about your future options. Do you have a job lined up for yourself, or will you need to search for one? Consider these points to be able to arrive conscious and confident at the negotiating table and truly fight for fair severance.
Prepare Your Negotiation Strategy
A negotiation strategy is of importance and can affect the outcome of the final severance discussions. Understanding your value; research severance packages within the industry to set reasonable expectations.
Decide on what matters most to you: whether this is money, extra healthcare, or a good reference. Write down the criteria for must-haves and for nice-to-haves that you can use to guide your conversations.
Anticipate arguments from your employer and get your responses ready. Practice your pitch to enhance your confidence.
Be ready to leave if the deal doesn’t match your needs so you get greater control. A well-planned strategy can enhance your confidence and severance package.
Communicate Effectively During Negotiations
Communication plays a crucial role during severance negotiation. You should clearly state your needs and expectations.
Use confident and assertive language without compromising politeness and professionalism. Listen carefully to what the employer has to say; this is out of respect and also serves to give you an idea of how the company views things.
Ask open-ended questions to foster dialogue and clear up doubts, if any. Maintain your composure even when the other person becomes uncomfortable. It is important to remain calm and composed.
Use facts and figures to strengthen your argument, thereby holding more weight. Be flexible depending on how the discussion proceeds; in this way, you will not let the sight of a fair settlement escapes your intent.
Review and Finalize the Agreement
Before signing the severance document, review the severance package very thoroughly.
Review all terms, including the amount owed, benefits, and any non-compete clauses. Make sure that what you specifically agreed upon at the table has been accurately documented on paper. Ask the lawyers to elaborate on any sections that remain unclear to you.
You can also consult a lawyer to ensure your rights are upheld and the terms are fair.
Consider any possible tax implications and compliance deadlines. If all indicators show that it’s okay to sign it, affix your signature to the agreement, but don’t forget to obtain a copy.
Protecting yourself and your future should be your top priority in negotiating your severance package. Don’t hesitate to ask for what you truly need.
