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7 Things Employees Should Know When Offered a Severance Package

Updated: Feb 15



What should you do when offered a severance package?


To help employees understand what to do when offered a severance package, we asked business leaders and HR professionals this question for their best advice. From determining your highest priorities to consulting with a lawyer, there’s several tips that may help you better understand your options and utilize the best resources if offered a severance package anytime in the future.


Here are seven pieces of advice on how to respond to being offered a severance package:


  • Negotiate

  • Make Sure It Comes With a Good Reference

  • Identify the Reasons Leading to the Offer

  • Consult With Your Lawyer

  • Find Your Point of Contact

  • Determine Your Highest Priorities

  • Say “Thank You”


Negotiate

If the employee is not being terminated for cause, the employee should ask for more severance. Their request may be denied or not possible given the situation, but there is no reason to not ask for more. As an employee, you will want to maximize the amount of severance you can receive to make your job hunt easier and take care of your personal finances and family.


Matt Blake, Entrepreneur, Investor and Partner


Make Sure It Comes With a Good Reference

As an employee, I will have a gut check to see if the severance package is worth my time and effort dedicated to the company. If I deem it enough, I will take it and leave peacefully, as I have a more important job to do (find a new job). If not, I’ll negotiate for a better package. I would also make sure my manager will talk about me in the best way possible as reference, should my new company do a reference check. This is the most important part of severance is ultimately leaving on good terms.


Jill Sandy, Constant Delights


Identify the Reasons Leading to the Offer

When you are offered a severance package, the decisions in the background were already made. What you should do first and foremost is identify the reasons leading to the offer. Why was I selected over my colleges? Did performance or politics play any part? Secondly, you don’t have to simply accept the package. Ask for a few days to consider the offer and consult with others in the company - you might not be the only one.


Wesley Burger, CloudTask


Consult With Your Lawyer

The most important piece of advice I’d give is to resist the temptation to accept right away (most organizations will give employees a week or more to review the terms and agree or not). This will give you time to review the terms, determine what you’re owed (e.g. payment for unused PTO), and if necessary, talk to a lawyer to ensure you’re not waiving any important rights - whether that is the ability to work for a competitor, the right to sue for unlawful behavior, or something else.


Kristen Zavo, Find Your Job Joy


Find Your Point of Contact

Understanding the actual severance package is of utmost importance. Having clarity as to whom you can contact for further questions or problem resolutions (should they arise) is going to assist you in feeling more at ease in transitioning. In addition, having the proper names and phone numbers should any issues arise is good to know and have at your fingertips.


Bianka Castillo, Recruiting Maven


Determine Your Highest Priorities

For some, the financial amount is a top priority. For others, it may be the continuation of benefits for some period of time. You can let your employer know your priority; however, the severance package may be set. Be sure that your severance package also addresses how employment references and inquiries from prospective employers will be handled. That may be a primary consideration to help you land with a new employer.


Colleen McManus, Senior HR Executive and Consultant


Say “Thank You”

Laying off or firing an employee is not an enjoyable thing for a leader or manager to do. There’s a lot of stress and agony that goes into the decision, and one thing employers may agonize over is a severance package. Yes, employers want to take care of employees as they transition to new professional opportunities. But, for some companies who are laying off employees for financial reasons, especially during COVID-19, offering severance may be an overextension of what a company is financially capable of. Any employee who receives a severance package offering may want to take a moment just to say “thank you.” It’s likely that the person extending the severance package put a lot of thought and effort into the offer, and showing some appreciation goes a long way. It’s not an easy experience for either the employer or the employee, but showing mutual respect towards each other makes things a little easier.


Brett Farmiloe, Markitors



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