602: Severance Package Negotiation: Asking for Exit Packages in Any Industry (Even Yours!)

Sandra Cloud 00:01

He granted me severance when they really don't do that. And it was because I asked. But I really needed support to ask for that because it was obviously such an uncomfortable thing for me to do.

Introduction 00:19

This is the Happen To Your Career podcast with Scott Anthony Barlow. We hope you stop doing work that doesn't fit you, figure out what does, and make it happen. We help you define the work that is unapologetically you, and then go get it. If you feel like you were meant for more, and you're ready to make a change, keep listening. Here's Scott. Here's Scott. Here's Scott.

Scott Anthony Barlow 00:44

Severance packages often aren't something that people give much thought. Actually, it's something most people try not to think about. It sounds like a terrible thing. You're either on the wrong end of a layoff or you're needing to leave a job, usually a pretty stressful time, right? But there's an entirely different way to think about severance. And if you understand the power of asking for severance, particularly at the right time, you can use it as a tool to assist in your intentional career change. Now, I'm not here to tell you that asking for severance is easy. It's not always even the right thing to do. It's not. However, receiving a severance package is not impossible. In fact, people actually do successfully ask for severance at all different types of organizations, even in industries where severance is practically unheard of. It requires a completely different level of thinking and expertise. By the way, this is an advanced level maneuver, and today we're gonna dive into this bold strategy and show you how asking for severance can not only benefit you, but also benefit the organization that you're leaving as well. And we're gonna show you some examples for how you can do this from Sandra's story, who you may have heard on the podcast back in episode 589. However, we cut this chapter out of her story at the time because we realized we needed to dedicate an entire episode to it. Because Sandra did what so many people claim is impossible. She negotiated a severance package in a field where it's pretty much unheard of. So let's discuss how you can make the impossible possible in your own career.

Scott Anthony Barlow 02:23

Before we dive into Sandra's story, we're going to cover the specifics here and her unconventional approach to severance. I want to take a step back and talk about why this even matters here. And, let me paint you a picture. You know it's time to leave your role, maybe it's draining you, maybe you're just bored, or your priorities outside of work are shifting, whatever it is, you may have outgrown it, you know you need to quit. By the way, if you're not quite there yet, trying to figure out if you should quit or not, we have an episode dedicated to that part of the process. That's episode 509. I'll link it up in the show notes, the description right on your podcast player. But once you have decided you need to quit, that's when things get really interesting. Because when it comes to how you quit, you actually have options, which a lot of people don't consider. One of those options is negotiating the severance package. And when we talk about negotiating severance, it's easy to think about finances, but when you're asking with the purpose of making a more intentional career change, it's about a lot more. Severance can help you create space, both financially and mentally, so you can work on figuring out what your next step should be, what type of work truly fits you, and then transition into that next chapter with ease. It's not for everybody, but it can be a career change strategy that can give you financial runway to support your transition, breathing room to recover from burnout, mental space to focus on what's next, time and bandwidth to explore or experiment with more fulfilling career paths. Negotiating your exit can transform what feels like an overwhelming leap into strategic, intentional steps towards your future. Okay, so instead of just putting in your notice, what if, instead, you could use this transition to set yourself up for success in your next career move. But not only that, what if you could come up with a plan that makes your exit a great situation for the organization and allows you to walk away with setting them up for success, as well as a severance package. Okay, this is where we cover why severance doesn't have to be selfish. I mean, it certainly can be, but it doesn't have to be, and I don't think it should be, quite honestly, I think it should be a great deal for all parties involved. You might be wondering, okay, well, how could asking for severance ever be good for the organization? And it sounds kind of self-serving on the surface, but when done thoughtfully, it can be mutually beneficial. Now I'm going to ask for you to think about severance as a service rather than just a payment. It turns out that in many situations, paying a severance can actually be a great way to support the team and organization that you're leaving behind. So here's a few examples of how severance can benefit you in the organization. It could be part of the deal that you're working ahead. You could use your remaining time to complete projects, wrap up loose ends, anticipate what's coming in the future, work on those upcoming projects with severance tied to hitting specific milestones. It could mean helping with a handoff like training and onboarding your replacement to make the transition smoother for everyone involved, and set your entire team up for success. How would that be, right? It could mean avoiding costly disruptions. Sometimes by staying a little longer, you can help the organization avoid big headaches like handling tax reporting or wrapping up quarters in tasks. In those cases, paying severance could actually save them time and money. It becomes an investment. Very cool, right? What about leveraging retirement benefits? If you're close to retirement, negotiating severance that includes retirement benefits or continues to retirement benefits, could actually help the organization maintain stability during the transition, or it might allow them, you know, to close out some of their past retirement packages if they've made changes during the time that you have been there at the organization. This is all very situational dependent. That's why this is an advanced maneuver. But I want to give you an example here. I actually had a family member negotiate six months of severance by staying on just long enough to train her... find and train her replacement, and this gave the organization the time that it needed to be able to stay on track through the hiring and onboarding. And by staying to transfer this knowledge and wrap up her responsibilities, she created value for both herself and all the people that she worked with. Pretty cool, right? The company agreed that six months of severance was a much better deal than risking costly mistakes. And to be clear, in this situation, this was six months of severance beyond the additional claim that she stayed. So, a great deal for her, a great deal for everybody who was impacted in the organization. But let's talk about Sandra's case. Because if you did listen to episode 589, with Sandra, you might be thinking, "Okay, all that sounds great, but it wouldn't work for me. My situation is different." That's what we tend to think as humans. This is a form of psychological bias, and it protects your ego, and it's really wonderful at certain times, it also tends to hold us back. So I've heard this countless times since we've been doing this since, I don't know, when did we start–2012 and 2013 is the business. And there's always resistance to the idea of negotiating severance. People think it's impossible in their situation, their industry or asking would actually burn bridges. Maybe that's true, but what if you knew how to do it so you could be the exception? Well, that's exactly what Sandra did. And to be really clear, I'm not sure that I would recommend this advanced level maneuver, going alone without taking a partner that has expertise in these areas. And that is what Sandra did. Sandra worked in education where severance packages are practically unheard of, people can get easily offended, and she could have quietly put in her notice and walked away, that's a thing that could have happened. Instead, she decided to push through the discomfort, create a plan that would help her organization and then ask for what she needed. Now, Sandra framed her severance request as a solution to her problem, particularly her departure through a critical time that could have created disruption. So it's her problem because she felt attachment to this organization, she put a lot of time and effort the school, in fact, that she put a lot of time and effort into getting it to the point that it was at, and also it's a problem for all the people that she was leaving behind. And instead of just leaving, she agreed to stay on for a brief period and wrap up loose ends and actually be able to work ahead to set that organization up, this school in education, for the entire... basically about a year ahead, almost. With support, she built a plan to approach her boss, navigate a tough conversation, and ended up successfully negotiating the financial runway she needed to transition to her next steps. What we've done here is we've broken down Sandra's strategy into five key considerations that you can use to tackle your severance negotiation.

Scott Anthony Barlow 09:54

Okay, let's dive into how she made the impossible possible. Number one, let's talk about assessing your relationship with your boss. This is a big deal. Reflect on past difficult conversations with your boss. Have you asked for other things in the past? How did that go? Approach the severance conversation with care and, of course, strategic planning. We're not wanting to burn bridges here, so instead, this is the part where you're likely to need support and likely to need outside perspective to assess. Is this very likely to work in your situation? Do you have the level of relationship? If you feel like you have a great relationship with your boss, that's a good sign to be able to consider next steps. If you've had past conversations that have gone particularly well, difficult conversations for your boss and for you, then that's a sign that you may be able to go forward here. In any case, I want you to get an outside perspective in order to understand is this a possibility, in addition to these road signs that I'm giving you here. Okay, by the way, we have an episode all about how to navigate relationships when you're leaving a job, it's called, Build Bridges: Don't Burn Them. How to Leave a Job on Good Terms. It's episode 551, we'll put all the mentions and references here inside the show notes, so you can just go in and click on it and listen to it if it's relevant for you. But this is step one is, assess do you have the potential relationship in order to make this possible for you? Most people, this is a fun thing that we found. Most people that are taking the time that care about developing themselves care legitimately for other people, they typically build those relationships naturally without even realizing it. So most people that are listening right now, if you're listening right now, chances are high you might already have that type of relationship in place without even knowing it.

Scott Anthony Barlow 11:55

Okay. Number two, I want you to go into this having an understanding of what your company's past practices. Could be policies, but usually we're interested in past practices for severance because the policy made different from the past practice in one way or another. Often, organizational policies are written for what is going to meet legal criteria or prevent additional risk. However, what is done behind the scenes could be completely different than what are those upfront policies. This is something I've seen over and over again. It is something that many people don't quite understand how that can work behind the scene unless they've delved into risk assessment from a legal perspective, or sometimes, if they've worked in HR or gotten to see behind the scenes how that works, maybe they've been in, I don't know, maybe you've been in a high executive level where you've seen this thing happen and taken in HR or a legal partner in order to do it over and over again. You'd be surprised how many organizations offer severance outside of the usual policies. If the situation warrants it, I would encourage you to speak to former colleagues or even people who have left the organization, so you can find out how it's been handled, and be able to collect some information in one way or another. And by the way, in the past, I worked in HR leadership, for a variety of different companies, who only did severance in certain situations on the norm, or, you know, in front facing policies. However, being on the HR team, there were so many specific situations where we went outside policy to provide severance. And I'll just give you a quick example. One of them in particular was somebody who was a former high performer in the organization, had a wonderful track record, been there for many years, and in his case, his performance started to dip significantly. It was no longer a great fit for the organization, but had this wealth of knowledge, and had all these balls in the air in the form of different projects and other things along those lines. So it was definitely time for him to go. It was no longer going to be a great fit for the organization in the future. But also needed to make sure that all of these balls weren't dropped and they were handed off and set up accordingly. So worked with him over a period of a couple of weeks to be able to wrap up, negotiate severance, and send him on his way and so that we could bring in a new person who would be a better fit, and he could get to a place that was going to be a better fit for him, quite frankly, and it ended up being a wonderful deal for everybody. I think in that particular case, I think that it was a pretty small amount of severance. I think it was like two months or 10 weeks or something along those lines, not a massive amount, either way, nothing in our policies saying that that's a normal thing that we would do. But it created this soft landing for him, and it avoided all of the normal performance types of processes in many different ways, was really truly the right thing to do in this person's case and for the rest of the team too. Point here, I want to make sure you have a good grasp on your company's history and policies. Also want to make sure that this gets integrated into your strategy as you're building it to be able to explain why this is a reasonable request, beyond reasonable, why it's actually a great thing for you and the rest of the organization.

Scott Anthony Barlow 15:34

Okay, this is where we move into building your negotiation plan. What do you need for a smooth transition? What's your ideal package? I want you to consider factors like severance pay, health insurance, PTO, what are you able to offer? What value are you able to create as you exit? Sometimes, it might be you vacating the spot, like in the example I just gave, like that truly was a value for the organization. We needed to vacate that spot and get somebody else in there that was going to be a great fit, and do that quick so that could be value on itself. But other types of value can you hire and train and find a replacement? Are there projects that are going to be incredibly high value for you to focus on? Are there things that you can work ahead on? We've given all of those examples here, those are great places to start. Or is there a reason why for staying on for a certain time frame that would benefit your company? Like, if you were an accountant, particularly like a tax accountant, they might not like you to stay on through tax season. Or a teacher, they might appreciate it if you could finish the semester out. In any case, make sure you figure out your needs before the conversation, so that you know what you want and what you can ask for. And usually if you listen to any of our advice on negotiation, of any kind, we want to develop a negotiation plan. The most basic pieces of a negotiation plan here going into it are understanding what your minimums are that you'll accept in a variety of different areas and your ideals or targets that you would love to receive or end up with. You don't have to share that minimum with your boss or whoever you're negotiating with, but it's important for you to know and you understand so that you don't accidentally or unintentionally accept below that minimum. Sandra, for example, asked for twice what she needed that she asked for much closer to her ideal target, because she knew her boss well, and she knew asking for double would likely land her with what she actually required to be able to leave. So here she is talking about how she came up with her negotiation plan.

Sandra Cloud 17:45

So, actually, when I first talked to my director about leaving, there's a thing in schools that apparently I was not as right about that as I thought that I was. But one of the things that you try not to do is leave mid year, mid academic year. That can be pretty hard on a school to try to scramble and figure it, figure that out. So I was really determined to make it through June, if I could of this year. And so my original intent was to ask him to figure out either some type of sabbatical or me working from home on Tuesday, Thursdays when I wasn't teaching, some way that I could still do, you know. So open enrollment for the school was in March, and that's a pretty busy time for marketing, so I didn't want to leave them in alert on that end. And so that was my original ask. And he actually said, "Well, why don't you leave in December? You know, it sounds like, health wise, that might be a better plan for you. It also sounds, you know, we have a beautiful Christmas party every year on the last day of school before Christmas break and you could winter break so you could go to the party and say goodbye to everybody, and that could be it. And I was a little resistant. And he said, "Well, what's your resistance?" And I said, "Well, all these things, I don't want to leave you in the lurch." He said, "Well, I think if we have you just focus on getting the marketing things in place then, you know," because that's also the end of our, we do spring term and fall term, so that was the end of the term. So he just wouldn't schedule me to teach any classes in the spring. So I noodled on that, and that's when I thought, you know, Oregon, getting a job in Oregon in January is not an awesome perspective. I just couldn't figure that out. I hadn't yet thought about tapping into my retirement account, and so it made me really nervous, and so I was just honest with him and said, "I can't imagine trying to get a job in January. Is there any way that you can do severance pay?" And I went through that terribly uncomfortable conversation. And after I talked with Ben, it was really good to have somebody to just to bounce ideas off of and brace myself with. So when I had that conversation with him, I've watched him negotiate before, and he likes to negotiate. And so I knew if I was... My tendency is just to say, "this is actually what I need." But I just had this feeling that I needed to ask for double what I wanted, which was at least two months salary. And basing, you know, if you look at businesses, they do a lot more in severance than two months. Education is not known for paying any severance at all. So he talked with the powers that be on his end, and they ended up granting me a consultant fee for my January paycheck, basically, and then had me continue on payroll as the marketing person, even though I got all the marketing done by December 15th. So everything was ready, everything was shared out, all the things that I take care of, I'd mapped out. And it's amazing, you know, I'd been so tired for so many years that I'd never gotten to the marketing really much before the first of December, and it carried through always until open enrollment in March. But somehow, having the clarity of what my next was, my activator and my strategy kicked in, I got everything done so early, so much earlier than I'd done for years, which felt really good to have all that time. So yeah, he granted me severance when they really don't do that. And it was because I asked, but I really needed support to ask for that, because it was obviously such an uncomfortable thing for me to do.

Scott Anthony Barlow 24:21

I heard you say, "I was really proud of myself because I went and did it anyways", even though it was insert all the emotions here, like, scary, uncomfortable, anxious, like, all the things, right? And you did it anyway.

Scott Anthony Barlow 21:42

To make the conversation go as smooth as possible, I want you to build a plan to maneuver through the conversation that you feel good about. This includes points you want to be sure to hit on, and that takes us to our next step, which becomes practice the conversation. By the way, a lot of people skip this step and then they realize it too late. When you're face to face with your boss and you can't think of how to approach it or what to say first, or you didn't prepare for something to go awry, I don't want you to skip this step. There are at this point, many different studies that if you do simple run throughs, simple practice in a variety of different ways, then that's going to increase your confidence going into this. So that might be a mock conversation with a partner. That's a lot of times what we'll do here with our clients. It might be charting out and having you record a run through of what you're going to say, so you can see yourself on video. That feels painful for people, but it makes a huge difference having gone through it and understanding how it's going to come off. Any case, you have to be able to have practiced it in one way or another that's going to change how the actual conversation goes. And also have a plan for how you're going to handle potential pushback. Having this rehearsed plan gives you the confidence to tackle the conversation that will likely feel uncomfortable at first. Okay, this last step is gonna sound ridiculous, but it is making the ask, having the courage to ask, in fact. You might think this goes without saying, obviously, but it's the hardest one, so we need to talk about it. You've done all this work to prepare, it's time to do the asking. You're probably going to be feeling so many emotions– could be scared, could be uncomfortable, anxious, all the things. Maybe you don't feel ready, often at that point, your brain will talk you out of it, or at least attempt to, you're never likely going to feel absolutely 100% ready. Why? Well, the one thing I've learned after working with thousands of people in all different types of negotiation, is that courage usually precedes confidence. Meaning, you don't need to feel fully confident to take the first step. Courage will help get the ball rolling, and then confidence will follow after you've done the thing. It's backwards, and it kind of sucks in the moment. But it's the truth. I promise the confidence will appear when you've just about given up hope. Sandra's story shows that the simple act of asking can be a huge leap toward creating the life and career that you want, even when it feels scary, just asking can create the space for opportunity to materialize. By the way, here's Sandra and I discussing exactly how it felt for her.

Sandra Cloud 24:33

One of the things that had happened was I said, "Ben, do you think I should ask for severance?" And he said, "Yes, you should ask for severance." So he helped me come up with the way I was going to ask. And I got to tell you, Scott, I am a fairly confident person. My boss and I have a friendship, as well as a mentorship, as well as he's my boss, like very multifaceted. I squirmed. I turned beat red. I brought out in sweat. I couldn't look directly at him. I had to look in my lap to get through this conversation to ask for severance. So I was really proud of myself for doing that. And I asked for twice what I needed, knowing how he tends to operate. So he gave me half of what I asked for, which was actually what I needed. And then I realized, I could tap into my retirement. I could just take some time and heal up. And so I did that. So now my slate is clear, like, I have no commitments, and I can start resting and trusting myself and listening to what my body seems to want.

Scott Anthony Barlow 25:39

Okay, you've heard Sandra's experience. Let's quickly cover those steps again that you should take to prepare for your own exit package conversation. I want you to assess your relationship with your boss, do your research, outline your negotiation plan or your ideal package, as well as your minimums, I want you to practice the conversation. And then, of course, the ask itself. And those are the steps when we really break it down. Next time you find yourself thinking something like, "That is just not possible in my situation." Or, "that could never work for me." Whether it's doing work you love, getting paid a certain salary, taking a month off to travel, which I've done numerous times, it's definitely worth it, by the way. We're asking for severance. I want you to think about not my situation, but Sandra's situation, or the other stories that you've heard here on the podcast. All of the stories that we tend to share are people who, at one point in time, thought it was impossible for them. But what if you could be the exception? Maybe it's impossible for some people, mostly because they won't move forward. But the biggest thing allowing you to be the exception is thinking about, "Why not you? Why not?" It's going to be somebody. Why not you? Don't wait for the perfect moment, make the choice now that your future self will thank you for. By the way, whether that's asking for severance or making a career change or leadership coaching, or anything else that is in your career that's a challenge or problem or aspiration, those are the things that we help with. We would love to be able to support you. Feel free to pick up your phone, go into your email right now. Email me directly, Scott@happentoyourcareer.com and put 'Conversation' in the subject line. I'll connect you with somebody on my team. We'll figure out the very best way that we can support you. That's Scott@happentoyourcareer.com put 'Conversation' in the subject line. And again, all the resources that we mentioned, you can find it in the description in the show notes.

Scott Anthony Barlow 27:35

And here's the sneak peek into what we have coming up in store for you next week.

Speaker 3 27:41

If you get to a job that uses your strengths and you're passionate about, that's like, then you can't go back. You're like, "Oh, this is what this feels like to work in an environment where I really enjoy it."

Scott Anthony Barlow 27:55

When it comes to making a career change, most people jump straight to the tactical stuff– your resumes, your job searching, interview skills. But if you're looking to make what we call an intentional career change, the real work starts internally. Self-awareness has to be the foundation. You must deeply understand your strengths, values, what energizes you, so you can align your next role with who you truly are. And one of the most effective ways to fast track this process is by discovering and leveraging your top strengths.

Scott Anthony Barlow 28:24

All that and plenty more next week right here on Happen To Your Career. Make sure that you don't miss it, and if you haven't already, click subscribe on your podcast player, so that you can download this podcast in your sleep, and you get it automatically, even the bonus episodes every single week, sometimes multiple times a week, until next week. Adios, I'm out.