Severance pay and offer negotiation

Posted: by HRNasty in Climbing Career Ladder, Job Interview Tips, What HR Really Thinks
Severance package

Tell them you have a vacation planned to decompress and start fresh with a clear mind

Severance packages

Last week I wrote about aspects of the job search that recently laid off employees should think about as they look for their next gig.  The post was intended to help job seekers overcome stereotypes that will unknowingly be encountered in the job search.  Employers, hiring managers and recruiters are all people and we all hold pre conceived notions based on past experience. The experience of being laid off from a large brand comes with it’s share of baggage and last weeks goal was expose pro active steps for job seekers to overcome stereotypes in the job search.

Since last weeks post, I have received a number of emails asking how to handle the severance packages that were offered, specifically as it relates to accepting job offers with new employers.

The gist of the questions were summed up below per one reader who posted their question in the comments section: 

“I heard that we will lose our severance package if we start a new job before Sept 15. Any advice on how to juggle around that?”

This is a great question and I should have addressed it in the original post. Before I answer the question I thought I would like to provide a high level summary on the differences between how employers and employees view severance packages as it is relevant to the answer.  Per my usual, I want to provide the business logic to the advice. Please keep in mind these are high level thoughts as they relate to the above question, asked in it’s entirety. I am not going to go into consideration for signed NDA’s, non-competes or 20-year tenured sr. execs.   

In my experience, there are a couple of ways to look at severance packages. One perspective is how the company looks at severance packages and the other is how employees view severance packages.  Not surprisingly, the view for both parties is very different.

Unfortunately, I have been responsible for handling a number of layoffs both domestic and abroad. With this in mind, I feel I have an understanding on how companies view severance packages. I have also been laid off myself, and know how I looked at and felt about the severance package and experience.

Laid Off Employ:

More often than not, employees look at a severance package as something that is “owed” to them when they are laid off.  When I have worked with employees who have been through a layoff, in most cases employees seem to expect that some sort of severance package is deserved, expected, and in some cases required. These are expectations, regardless of the tenure of employee.  For most employees, severance packages are expected and viewed more as a “settlement” than a severance package.

As employees, we have given our heart and our souls to our employers. We have been loyal to the company in hard times. In some cases many years of service have been given and it is easy to feel like we are “owed”. When we find ourselves suddenly without a job through no fault of our own with bills to pay, it is easy to look at the severance package more as a settlement for pain and suffering. I have been there. I understand this.      

Insurance settlement vs. severance package

When we are injured in a car accident and it is not our fault, the insurance company will pay for any medical expenses and in addition to this, when it is appropriate the insurance company will pay you for your “pain and suffering”. We may have received $5K to fix our car, $10K to pay our medical bills and in some cases $50K for pain and suffering.

The company’s view a severance package

At a very high level, the company looks at employees as service providers.  As employees we provide a service and the company pays us for this service.  We work for 2 weeks and then we are paid for 2 weeks of work.  Just like contractors, we work and we are compensated. If we were contractors or vendors providing a service to the company, we wouldn’t ask for a “severance” package when the job was complete.   

To the company a severance package is there to help a recently laid off employee during the transition period when the employee is looking for the next job and will have no income. In most cases, employers are not required to pay a severance.  Paying a severance may be the “right thing to do”, but is is not a requirement.

Remember, layoffs usually happen because the company is in some sort of financial hardship or wants to improve its position. When a company is trying to strengthen its financial position, paying 2 months of salary as a severance for employees who are not providing a service is a tough thing to do.  Do large companies have cash in the bank?  Yes, absolutely?  Does local companies want to be known as a good employer and have good relations with it customers and the community?  Yes.  And does large brands want to give confidence to the remaining employees that they will not be left high and dry if something else were to happen to the company so the remaining employees don’t all go running off?  Probably. 

Do companies that lay off employees look at severance packages as “pain and suffering” payments?  No.  Do they look at them as “loyalty” payments?  No, they do not. At the end of the day, this is a business with a board of directors and stock holders that want results.   

Back to our initial question:

I heard that we will lose our severance package if we start a new job before Sept 15.  Any advice on how to juggle around that?

Layoffs took place the last week of July and it sounds like severance for some readers will be about 6 weeks.  I don’t know the tenure of the employee, but by most standards, this is dammed generous.

I know that it sounds like we are leaving a couple of months of pay on the table if we are able to hook up a new gig on August 1, but try not to look at the severance as the company saying “Hey we screwed you, here is a something to ease the pain and make you whole” payment.  Look at this STRICTLY as an “I know it isn’t optimum, but this severance package is designed to help tide you over until you find a new job”.  And this is exactly what it is. It isn’t a retirement bonus, it isn’t a bonus for 20 years of service.  It is a company trying to do the right thing for the ex-employees, the business and it’s stockholders. This is not for “pain and suffering”.

Generally speaking “pain and suffering” payments are designed to help us pay for expenses moving forward like physical therapy or because we lost the use of a limb. These insurance settlements are designed to help make us “whole”.  If we are in a car accident and the car needs repairs but we are not injured, the car repairs will be paid for but we won’t receive a settlement. If you talk with people who have received settlements for pain and suffering, I am willing to bet that these victims wish they were not injured and wouldn’t have needed the settlement.  

If it were a companies intent to pay for pain and suffering, the company would pay out a single lump sum payment and say you can keep the entire payment whether you find a job or not. Sorry this sounds like crap, and I don’t know the exact structure of every individual severance, but it sounds like this is how our reader’s severance is structured. Again, I don’t know the individual situation, but to me, what our reader received sounds fair to the employee and fair to the stockholders. 

Think about it like an ‘unemployment check” from your ex-employer, but instead of the payment being a percentage of your pay like the governments unemployment payment paid out over many months, this is 100% pay over the course of 1.5 months.

Let’s say we are unemployed and collecting government unemployment. If we are collecting the government unemployment and then found a job, the unemployment payments would end. We are not going to try to collect unemployment after we find our next gig. 

How do I juggle around this?

We want to start looking for a job ASAP.  We don’t have to accept the position, but we want to start looking.  Don’t let the severance package stipulations effect your job search. Assuming that an offer isn’t going to come on day 1 – 15 after the layoff (putting resume together, interviewing, etc take time) just tell your potential hiring manager towards the offer stage (not the first interview) that you have a vacation planned and need to push out your start date. Explain that after you were laid off, you decided you wanted to clear your head and start your new job with a clear mind. Explain that you ALREADY have plans to take your family on vacation, hotels books, flights paid, and GUESS WHEN YOU WILL GET BACK? When your severance payments from your past employer end.

Hopefully we are going to be able to negotiate an as good or better salary than your prior gig. With this in mind, you are going to want to start before those severance payments end, so just adjust your “pre planned vacation speech” accordingly. 

If you have a vacation planned with the family to clear your mind after a layoff, or to go back home to spend time with family to re-ground yourself, most employers will be willing to wait an extra week or two for that kind of smart move. It’s in their best interest to hire a relaxed and refreshed employee. I know I don’t want to hire bitter, angry, hasn’t gotten over it, needs to pay the bills ASAP employee.   

If you want your employer to rescind the offer just say, “Hey, I can accept the job, but I want to keep getting my severance payments from my prior employer. Can I start when those payments end in the middle of September?  Actually, I want to collect some government unemployment as well.  Can this job start in 3 months”?  

Again, I am sorry we are in this situation and hopefully the above provides perspective.
HRNasty

nasty: an unreal maneuver of incredible technique, something that is ridiculously good, tricky and manipulative but with a result that can’t help but be admired, a phrase used to describe someone that is good at something. “He has a nasty forkball”.

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Microsoft Layoff

How to overcome a layoff from a Large Box Employer

Microsoft Layoffs and how candidates can bounce back

Here in Seattle, Washington the big news this past week was the Microsoft layoffs of close to 18,000 employees and vendors. This is huge number for any company but until something like this happens in your city, it is an easy topic to read and forget. When it happens in your hometown it becomes very real. An internal memo published in Geekwire is linked here. With Microsoft being one of the larger employers in the Seattle / Redmond area, everyone knows someone that works for this tech giant and we are thinking about how the announcement of the Microsoft layoff will affect our friends.

First, I would like to say I feel for those that were laid off last week. Getting laid off sucks under any circumstance. I am sure that for current Microsoft employees, questions about the future are looming as well. With job uncertainty in mind, this week’s goal is to provide job search insight for those affected by the Microsoft layoff.

For those new to the site, I started this blog in 2008 to help candidates that were displaced from their employer when the economy turned. The goal was to provide current insights on the job search process. Although todays post is applicable to anyone, I will specifically message Microsoft employees as they search for their next gig. It has been less than a week and already I have received half a dozen resumes from friends, or friends of friends that are looking for new positions including employees that were tenured and full time employees.  The Microsoft layoff isn’t just vendors.

There will be a number of long tenured employees affected by the Microsoft layoffs and in my experience, it is this demographic that has the toughest time making a transition to another company. When the economy took a turn in 2008, there were a lot of folks who couldn’t find a job. Obviously, there were fewer jobs, but I saw something else. There were a lot of unemployed candidates that had been employed by a single employer for 10 – 15+ years.  For these laid off candidates, so much changed in the job search world over those 10 – 15 years while they were employed that it was like stepping out of a time bubble and into a new era. Unemployed candidates were writing their resumes and conducting their job searches in 2008 – 2010 in the same way they wrote their resume and conducted a job search in the 1990’s.  Each of those 15 years was the equivalent of a dog year (7).  

Both Big Box Employer / Long Term Employer provided job security. The fear of being laid off by these employers was eliminated and there was no reason to keep up with current job search practices. The assumption was that we were going to retire with a company so there wasn’t any reason to think about LinkedIn or professional networking. There wasn’t a need to keep updating our resume.

With fewer jobs and plenty of unemployed candidates in 2008, employers become very picky. I observed first hand how candidate interview skills had become outdated and the interview process had become more sophisticated. Applicant Tracking Systems, LinkedIn and other online resources provided employers with more tools to leverage and this tightened the interview gauntlet.  Sophisticated millenniums with their personal blogs, digital portfolios and online job search savvy, upped the ante for both schools of candidates. It was a perfect storm of job security, technology and a new generation of skills. In the end, candidates that didn’t keep current were passed over.

Standard dating example

If we were dating our significant other and then became married in the early or mid 90’s we were done with single bars. With marriage, we are no longer worrying about the dating scene. If we added a child or two, our priorities shifted from the latest dance steps to our kids. We were hanging with mommy groups and we didn’t worry about the evolution of online dating resources like Craigslist, FriendFinder, or Tinder. Maybe we went an extra season or two before updating our wardrobe and visits to the gym became less frequent. AKA, we let ourselves go. If we find ourselves separated / divorced in 2014, we shouldn’t go back on the dating scene with our Running Man and Cabbage Patch dance moves. The newspaper’s personal ads and bar scene has been replaced by Facebook and Tinder. Our 5-year-old baggie jeans are now replaced with straight legs. In the end, singles that didn’t keep current are going to be passed over. Sound familiar?

If we interview for a job with the same process and practices that landed us a job 10 years ago we will remain unemployed.

If you are in a situation where you have tenure and suddenly find yourself swimming with the sharks, I would like to try and provide some insight so that you can win this game. The following is what I have counseled to Microsoft employees that have been laid off in the past.

The first thing I say to anyone that is laid off from any company: Sign-up for unemployment. This is not the time to be too proud. Unemployment isn’t a last resort, it is a proactive move. Unemployment checks are funds that you are entitled to and I would say you really need help if you pass on this. Sign-up can be done online and there isn’t a need to visit the unemployment office every week. If you received a severance package that is being paid out over a course of time, we are obviously not eligible for unemployment yet, but we can start the networking and interview process. Sign-up as soon as you are eligible because it takes 10 days before your first check is processed.

Feel good about your assets as a Microsoft employee.

  • Microsoft is a great brand to list on a resume. Microsoft is a world-class employer so they don’t have to hire just anyone. Know that you have a solid skill set. As opposed to working for an unknown employer, everyone in the world knows Microsoft. You won’t have to explain your last employers product or results.
  • Microsoft has had a lot of successes in the past, so chances are that you were working in a business unit that will provide you significant resume material. This makes it easier to quantify our accomplishments and talk about results on our resume and in the job interview. Just explaining what you didn’t isn’t enough. We need explain how we helped the bottom line.
  • This layoff isn’t your fault. This is a company decision and everyone in the city knows that this isn’t an individual performance issue. Everyone in town heard Nadella’s message so you won’t have to go into the details and explain it over and over.

We will be hired for our strengths but we will be declined for our weakness.

We need to learn to hide or disguise the following Microsoft stereotypes. What are the stereotypes of a tenured MSFT employee or any Large Box Employer? All large companies have their reputations and we need to be aware of and over come these in our communication with potential employers. Microsofties may be offended by the below, but I say this not to insult, but to provide insight on how hiring mangers look at the tech giant’s workforce.

  • If we were employed by only Microsoft for a number of years, the assumption is that we only know how to do things the Microsoft or the Acme Publishing way. It will be assumed by hiring managers that these will be hard habits to break. To break these assumptions, explain how you have kept current with new technologies outside of .NET and C. Inform the interviewers that you are comfortable with a MacBook, are not a slave to Outlook or use an iPhone. 
  • A lot of tenured Large Box employees have a “look”, specifically the employees who thought they were going to retire with said employer. Wardrobe and our presentation layer becomes less of a concern when we know we aren’t going to be dating anytime soon. This “look” is going to create our first impress so we need to overcome this stereotype.  We don’t need a whole new wardrobe. We just need to get through a couple of interviews. The Nordstrom half yearly is going on as we speak and there is a Banana Republic outlet mall right up I-90. If you wear glasses, make sure your frames are current. We want to create the image of an employee that has kept current in all aspects of life.
  • Large Box companies grew because they are successful.  World class companies more so. There is a subtle arrogance that comes across with candidate who has been with Number 1 all of their career and I get this. If the company has been reinforcing that we are winners for the past 10 years, there is going to be some pride of ownership that isn’t going to be readily shed. Practice humility in the interview. Be open minded to the new companies process, protocol and “way”.
  • Be visibly excited about the opportunity. If we present ourselves like Nadella just stole our puppy (and he did), the recruiter and hiring manager will see this.  They don’t want someone who is living in the past, they want to hire someone who can look forward to the next opportunity with a positive outlook.
  • MSFT has a reputation for throwing a lot of resources at projects. As candidates, we want to convey that we have experience rolling up our shirtsleeves and getting dirty.  We want to convey that we can complete projects with minimal resources.
  • Which leads me to my last stereotype.
  • Please don’t expect the same level of benefits. Candidates recently laid off from Large Box Employers are worried about benefits and I get this. We have families and need to provide.  MSFT is well known for having rich benefit plans and it is not uncommon for candidates to leave smaller employers for MSFT when they want to start a family. Most employers in town will not have the same benefit package as MSFT. We should avoid asking about the benefits package in the very first interview.
  • Work Life balance.  With any large company comes a stereotype that the employee force is there for the work-life balance and the 9-5 hours. I know that there are still plenty of MSFT employees that put in a lot of hours, but this stereotype has been forgotten. Pro actively explaining that we are looking for work life balance to take care of the family will only reinforce the message of coasting. I am not saying we shouldn’t find out the expected hours. I just wouldn’t bring this up in the very first interview.

Reading up on the culture of the new company and embracing its differences will go far in an interview to give confidence that you have not just moved on from the Microsoft layoff, but are excited for the next challenge. No one wants to hire someone that is living in the past.

Hopefully the above helped shed some insight,

HRNasty

nasty: an unreal maneuver of incredible technique, something that is ridiculously good, tricky and manipulative but with a result that can’t help but be admired, a phrase used to describe someone that is good at something. “He has a nasty forkball”.

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