Did you know that negotiating your severance package before you even start a job is a thing? It’s a smart strategy to maximize your benefits if you ever need to exit the company. Let’s delve into how you can secure your exit package upfront.
Negotiating a severance before being hired involves understanding the key elements of employment contracts. These contracts outline the rights and obligations of both the employer and employee and are settled before you join the company. They can be powerful tools for setting terms about severance from the get-go.
An employment contract might include clauses about maintaining confidentiality, non-solicitation of colleagues or clients, and committing your full work capacity to the company. It also might restrict using company resources for personal gain or engaging in any competing interests.
One of the critical components of these contracts is the termination clause. This specifies the conditions under which you can be terminated and what compensation you’d receive. Common grounds for termination include breach of contract or engaging in harmful activities against the company’s interests. The contract will detail the compensation if terminated without cause and outline the processes for dispute resolution, typically through arbitration.
Negotiating these contracts isn’t just about protecting yourself in case of termination. It’s about securing a deal that acknowledges your value to the company from the moment you start. Key negotiation points include the amount of severance pay, continuation of benefits, and potentially a clause that covers stock option retention.
In practical terms, the discussion about an employment contract usually comes up during the hiring process, often initiated by the prospective employee. While employers might be hesitant due to the financial commitment, highlighting the mutual benefits can facilitate the negotiation. These contracts are more common at the executive level but are possible at other levels if the employee’s role is crucial to the company.
Here’s a personal anecdote to illustrate: In my career, I’ve negotiated employment contracts several times. In one case, a company adapted an existing contract of mine, adjusting the severance payout from one year to six months’ salary, which I accepted because of the higher overall compensation package. Another time, I had to advocate for my severance terms when the company wanted to introduce performance-based clauses that could undermine the guaranteed payout. Eventually, I accepted a modified version after ensuring it still offered substantial security.
So, how can you secure an employment contract for yourself? It starts with recognizing your worth and the unique contributions you can offer to a company. Be prepared to present a compelling case for why such a contract benefits both parties, especially in terms of securing long-term commitment and performance.
And finally, consider all aspects of what you’re negotiating. It’s not just about the money—think about other benefits like additional vacation time, relocation packages, or stock options. Make sure these are clearly outlined in your contract to avoid any misunderstandings later.
In conclusion, negotiating your severance before you start a new job sets a clear understanding of what both parties can expect from the employment relationship. It provides security and peace of mind, allowing you to focus fully on your role, knowing that you are protected if things don’t work out.
