Over the years, I’ve received some doubt from three types of people regarding the feasibility of negotiating a severance package.
The first set of people I’ll call the holier than thou employees. They tell me that “they’d never do such a thing” to their employer, as if their employer was a sacred cow. But what they don’t seem to realize, probably due to having never experienced a recession, is that corporations won’t hesitate to lay them off as soon as times get tough.
The second set of people are those who do not know their worth. They are the type that let colleagues and bosses step all over them because they are too afraid to speak up. They also fear they do not provide enough value to warrant a severance, even though they provide enough value to have a job.
The final set of unbelievers are those who think they are God’s gift to their employers. They think they provide so much value they can’t fathom an employer paying them to leave. But what these people don’t realize is that it is precisely because they are so valuable that they have leverage to negotiate a severance to ensure continuity in the job. No employer wants to have its superstar employee leave suddenly and not have an immediate replacement. Further, once you indicate you want to work something out, no employer will want you to stay long-term.
Despite the doubters, I believe with all my heart that trying to negotiate a severance package is the financially savviest move if you plan to retire early, take a break, go back to school, or change careers. If you plan to leave anyway and if you negotiate the situation properly, there is no downside to having a conversation.
If I had not received a severance package, it is highly unlikely I would have left my job at 34. I would have kept on working until at least 40. When I look back and realize how much more stress and unhappiness I would have had to endure had I stayed for six more years, my severance package only appreciates in value. Being able to travel, pursue other interests, start a family, be a stay at home dad, and build Financial Samurai have been priceless endeavors.
Now that my severance negotiation book is on its third edition, I’ve heard back from hundreds of readers who’ve successfully negotiated between $10,000 – $700,000 severance packages. But in this article, I want to highlight the one that takes the cake.