Parents looking to leave work, listen up! As someone who literally wrote the book on how to negotiate a severance, let me share with you a severance negotiation success story if you want to leave your job to spend more time with your kids. Severance negotiation success stories give uncertain employees more confidence to negotiate one for themselves.
The #1 thing I recommend for anybody who aspires to retire early is to negotiate a severance. If you are planning on quitting anyway, there is no downside.
Every time I hear of someone quitting their job, I'm happy for them. But at the same time, I also liken it to a baby panda dying in the woods. Leaving so much potential money on the table is a travesty because of ignorance, fear of confrontation, or not knowing your worth. I want to change this.
I'm happy to announce the latest edition of How To Engineer Your Layoff is now live! The book first went into production in 2012 after I engineered my own layoff from the finance world at age 34.
The book is now over 200 pages with new resources, strategies, and additional case studies thanks to tremendous reader feedback.
Negotiating a severance package was my #1 enabler for retiring early. And now I'm a parent and so glad that I have the flexibility to spend so much time with my kids every day. It takes a village to raise young children. So all of you parents looking to leave work and raise a family, try to do so with a severance.
How To Engineer Your Layoff's New Features
1) The latest edition expands the ebook to over 200 pages. We've added new chapters, a useful worksheet, and a step-by-step checklist to help guide you through the severance negotiation process.
2) Thanks to continuous feedback from readers, we've been able to add new real-life case studies in the latest edition to demonstrate just how beneficial it can be to negotiate a severance. We've included more severance negotiation success stories from a wide range of industries and packages.
3) The latest edition also brings in recent data, revised facts and figures, new charts and graphics, and an expanded featured posts section to help you learn more. We've also added helpful information on employment news, unemployment resources, market trends, and more.
To help celebrate the recent launch, one of our readers, Mark, wanted to share his story of how negotiating a severance changed his family's life for the better. His is a case study for working parents who want to be stay at home parents. Mark's example is a true severance negotiation success story.
I've also created a $10 discount code “saveten” for anybody interested.
A Severance Negotiation Success Story
There are lots of parents looking to leave work in order to spend more time with their kids. Here's one success story written by Mark:
Sam's book, How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye, is a must buy for anybody looking to negotiate a severance, retire early, or simply do something else with their life. In our case, it was for my wife to spend more time with our two kids.
My name is Mark and I am pretty much you’re average American. I am married with two kids and a house in the suburbs. My wife, Mary, is even keel, calm and non-confrontational.
While that works for our marriage as we rarely get into meaningful disagreements, I believe those qualities hurt her compensation at work.
Throughout the eight-year tenure at her current company, I have often had to push her to speak up and advocate for herself. After all, if you won’t stand up for yourself, you cannot expect others to.
While it has taken some gentle coaxing and sometimes a little pressure, each time she has taken my advice to speak up for herself, it has paid off.
This is a story of encouraging everyone to alway speak up and ask for what you want.
Always Ask For What You Want
Situation #1: Asking for a raise after completing a rotation program
Mary began working at Company X, which is publicly traded, about eight years ago. She was in the company’s rotation program. The rotation program has three separate one-year stints in different departments of the Finance Division.
While in the program, Mary received excellent reviews at all three of her positions and upon completion, she was placed in a highly visible department with high expectations and a significant workload.
When discussing her new role, I was adamant that she needed to be compensated properly, and based on her excellent reviews, she had the leverage and performance to justify a significant salary increase.
After a few conversations, Mary agreed to speak up and scheduled a meeting with her boss. In the meeting Mary asked for a salary commensurate with her new position and not just the token annual increase that comes with her review. She was able to point to her work experience and the commendation she had received from her prior bosses.
Result: Mary received 90% of the increase she asked for and in her annual review, also began to receive equity options in the Company on a rolling, three-year vesting schedule.
Situation #2: Going From Full-time to Part-time
In December of 2015, we had our first child. After taking a twelve-week maternity leave, Mary returned to work. As stated, her job was demanding with 10-12 hour days.
My job, as an energy trader also had long days, irregular hours, weekend work, not to mention a heinous commute. Despite these factors, we tried both working full time for a couple of months.
The result was a horrible quality of life. We had no time for leisure or for each other. Further, there was high stress on my mother as the baby’s primary babysitter and caretaker.
Convinced we could no longer go on like this, I told Mary that she should meet with her boss and tell him that she either needed to immediately transition to part-time employment or she had to quit. Initially, Mary was skeptical. Not only did no one in her group work part-time, but most people also worked 50+ hours a week.
However, my argument was that we really had nothing to lose by her requesting this change, as the current situation was unsustainable. Again, after taking some time to consider my suggestion, Mary met with her boss and explained that it was part-time or bust.
Result: After a week to consider her request as “they have never done this before,” Mary was granted a part-time position and started working 8:30 AM – 12:30 PM, five days a week. It changed everyone’s lives for the better, especially my daughter's. And now Mary has been a part-time worker for almost 2.5 years.
Additionally, while Mary’s salary was cut in half, it was almost like found money as we were ready to forego her entire paycheck. This found money was only supplemented through more equity vesting, options granted, 401k matches and service time accrued.
Situation #3: Receiving A Severance & All Her Equity
Mary got pregnant with our second child in February of 2018. We had always planned for her to stop working, at least for a while, when our second child was born. We felt like this would make the most sense for us as the cost of daycare becomes very expensive when you get to two kids, especially as Mary was now only working part-time anyway.
Like many of you, I have been an avid reader of Financial Samurai for years now. I knew that Sam was an expert in negotiating a severance and ‘engineering a layoff.’ I read all the articles he posted on this topic and showed them to my wife, encouraging her to try and do the same.
She said I was crazy, yadda, yadda, yadda and that her situation was completely different. Well that all changed when her company was acquired during the summer of 2018. With such a large acquisition there was certain to be layoffs, especially in a support function like my wife’s.
As she began to read the tea leaves at work as more information about the transaction was signaled, disseminated and gossiped about on a daily basis, I took it upon myself to contact Sam.
Getting Some Severance Negotiation Help
After engaging Sam as a consultant, he and I spoke and went through the entire situation (as well as everything else in my ‘financial life’). Sam was able to give me some good advice, such as expertise on things like WARN Act pay and protected classes.
But most importantly, Sam knew how to stage the discussions Mary was to have with her boss to optimize her benefits. Mary more or less stuck to the plan he outlined and we are very happy with the outcome.
Result: Mary not only received WARN Act pay and the vesting of ALL her equity options ($40,000 value), she also received a severance of 15 weeks worth of pay! In fact, Mary was actually able to procure a letter from the HR department stating that she would get severance, including for those years, on a pro-rated scale, in which she worked part-time.
We are over the moon, and this result is by far better than what we had hoped for. Before reading How To Engineer Your Layoff, we thought there was little-to-no chance she'd be able to get any of her equity options, let alone a severance worth 15 weeks of pay on top of three months of WARN Act pay.
The overall severance package was worth over $85,000. If we had not bought Sam's book, my wife would have just quit.
Always Negotiate Your Freedom
The bottom line is that purchasing Sam's book was money well spent, literally times a thousand.
Not only did I learn a lot and get great guidance, but it forced my wife to be proactive as I could say to her, “Mary, I spent good money on getting this advice. You have to talk to your boss before you go out on maternity.”
Engaging Sam was kind of my version of speaking up and advocating for myself. Like all the situations described earlier, I am happy with the results and it reinforces the idea that no one is a better champion for yourself than you.
As Sam says, “never quit, get laid off instead.” How To Engineer Your Layoff is a must read for anybody looking to leave their job with a nice financial runway. This is especially a great read for parents looking to leave work and focus on family like my wife. The first five years of a kid's life goes quick. It's great to make the most of these years.
Regards,
Mark
Related: Why Quitting Your Job Is The Selfish Way To Go
Readers, why do people fear speaking up for what they think they deserve at work? If you are willing to quit work, why wouldn't you at least try to negotiate a severance? Don't forget to use the temporary “saveten” code for $10 off if you plan to buy the book. Any parents looking to leave work out there? Would you like to share your Severance Negotiation Success Story?
Sam;
I bought the 2nd edition and was able to apply its principles effectively. I was ready to retire, but finessed 18 mos severance + 6 mos exec coaching (+ all standard retirement benefits). Best ROI ever! Thanks for the insights!
Music to my ears! Congrats!
Can you imagine quitting and getting none of that? It’s like winning the lottery. Got to love it!
Not only that, but secured good slots for my entire team and ensured that they weren’t sacrificed unnecessarily. No bridges burned! Can’t thank you enough.
Would like to know how this method would work for folks who are employed by the government?
There are formal rules published by the Office of Personnel Management that cover involuntary separations from govt service. Severance pay and healthcare benefits are determined by a set formula. So the severance negotiation process will have less flexibility for government officials.
However, you can definitely negotiate date of termination and other things. So many things are negotiable. People just don’t bother to negotiate and create relationships that allow them to negotiate.
See: https://ask.fedweek.com/federal-government-policies/reduction-in-force/
Sam,
Understood. There are things one can negotiate. But the return of the negotiation is much much less than what one could do in private sectors. You do have to remember those government officials always think and work like typical government working stiffs and never think outside the box like an entrepreneur.
Hey Sam – Thank you for all the great content over the years. I’ve been an early reader of your blog and my family’s finances are MUCH better off for it! I’m reading your book as prep for my inevitable transition to SAHD, and I had a quick question. I work remotely in a different state than my employer. Can you confirm I would be educating myself based on my home office’s state laws vs the corporate location?
Many thanks, and I’m eager to check in again with you for a proper thank you once we engineer our “lifestyle change”.
Cheers!!
Awesome! Great to hear.
Each case is different, but know that everything is negotiable. My severance and WARN act pay was based on New York State standards bc my firm’s US HW was in NYC.
Best to learn the standards from your home state and your headquarters state, and negotiate for the best one.
Good luck!
I’ve read a few of these testimonials. So far, it doesn’t seem like they apply to start ups. Can you speak to whether or not it’s possible to negotiate a severance at that type of company?
Sure. At Angel and Seed stage, an employee has almost zero chance. But a founder or co-founder does b/c s/he can negotiate keeping his or her equity stake even if booted.
The chances of negotiating a severance grows with each funding stage from Series A – F, then to IPO.
If your firm receives $20 million in Series A funding and you get let go within the first 6 months of getting that funding, then you certainly have a chance of getting a severance with the proper negotiation strategies. Each funding round should be enough to fund a company for ~18 months on average.
If you are negotiating a severance in the 18th month after a funding round, the the chances go down. The key with startups may be determining how valuable the equity is, and whether you’re willing to pay taxes to get them.
Everything is negotiable. Remember this, and you will do better than someone who doesn’t believe this.
Related: Career Advice For Folks Joining Startups: Sleep With One Eye Open
Excellent analysis! Thank you very much. I can see why your articles in your book have done so well.
Thanks so much. This is very insightful information.
Way to go! I love to hear success stories like this. I completely agree that it’s worth taking the chance to ask for part time hours or an opportunity to get laid off especially when you are considering leaving anyway. It can seem like a crazy concept that wouldn’t fly at all but reading Sam’s book, reading testimonials like this, and having the courage to speak up and ask really open your eyes. It worked for me too so I’m a true believer. Congrats on your family’s severance success story!
Hey Sam,
Just curious if I can get a free update if I just bought your ebook about 3 months ago? It would be very interesting to read the updated version since I haven’t executed my plan yet.
Thank you!
Sure, happy to send the latest version over. Just email me your purchase order #.
Will check out the book. Thanks!
I think one of the reasons why early retirees quit instead of negotiate a severance is because they probably weren’t there very long, had mediocre jobs, or knew they weren’t very valuable to their employers.
If you’re some 28 year old kid who has only been working for 2 years at your firm, and wants to pivot to be an early retirement blogger, your employer will probably kick you out the door!
It’s definitely true that you need to build some type of goodwill to negotiate a severance.
No employer is going to take care of an employee who was an entitled imbecile. There needs to be value added on both sides.
I think most people are simply too afraid of confrontation to ask for a severance.
And I think this is what employers hope for. Their employees just stay quiet and be good soldiers. This is were you can make so much more if you jump to another firm.
I received a severance a couple years ago unexpectedly when my department did a bunch of layoffs. I wasn’t planning on leaving the firm, but it was also one of the best things that ever happened to me because it gave me a cushion to be a stay at home mom.
It is certainly every managers hope that every employee stays quiet, puts their head down, never complains, never asked for a raise or a promotion etc.
And those who don’t, inevitably get left behind. Then they wake up one day angry and wondering how come everybody else is getting paid more than them.
I do hope that more people will stand up for themselves and speak up. I know it’s scary, but I hope my book will help empower those to know their worth.
Congrats on publishing the latest edition! The book also helped me recognize how much power I have as an employee. I also did not think a severance was possible, but I got about $38,000. My wife and I went Europe for three months during our 8 year old’s summer break.
Six months later, I found a better job that paid 25% more! The six months was exactly what I needed to recharge and find something new. Thank you.
Great to hear! Sometimes we just need a little bit of a break from work. If I had three months off for a sabbatical, I probably could’ve worked for at least another two or three more years.
But we didn’t have the sabbatical culture because we were producers. And if we weren’t producing we weren’t going to get paid a good discretionary bonus.
After about six months for me, I really didn’t wanna go back to work anymore. I didn’t miss the grind.