Recently laid-off? How to negotiate a surprisingly competitive severance

With ongoing volatility in our economy this year, there’s never been a better time for women to ask for more if they’ve been overburdened at work – or to ask for severance in the event of a layoff.

The last few months of job reports show that workers’ weekly hours are slightly down (from 34.7 to 34.4) – but this doesn’t account for the mental load and invisible labor many workers – especially women and women of color – feel every day at their jobs.

These women are often asked or pressured to do lots of “office housework” that isn’t accounted for in their salary: mentoring, recruiting, taking notes in meetings, organizing parties – the list goes on.

Additionally, if people have left the department, high-performing women may be picking up additional work responsibilities. So even with average hourly earnings up 4.4 percent from a year ago, you may still be underpaid for the work you are doing today.

Calculating your real salary

Professional women need to know how to negotiate for pay that reflects all of this extra labor – in an exercise I call “Calculating Your Real Salary.” The secret to this?

Salary transparency laws are the rise in many areas of the country, so you now have extra data to use when you negotiate. Very recent polling data from CNBC and Momentive shows that while more states and cities are implementing salary transparency ranges for open job listings, only 12 percent of women know they can use these to negotiate a raise while still at their jobs!

Make a list of EVERYTHING you do in a week. Pay special attention to everything that is outside your original job description.

Tell your company what impact that work has on their bottom line (for example, filling in for a manager who quit, helping the department recruit more women of color, or mentoring juniors at the company so they don’t leave).

If you can, attach dollar amounts to the work you have done to make or save the company money. With all this information, write the description of the job you’re actually doing – not the smaller one for which they originally hired you – and do research on the compensation that should accompany it. Use new job listings, whether for your company or a market competitor, to come up with a new, appropriate salary range.

A final note of caution: some companies may be deflating their published salary ranges so as not to give away the full amount they have to offer. So if you are seeking a raise from within the company, and you have substantial experience, know that your role and your qualifications may be worth even more than the top of the published band.

Severance: An entry conversation, not an exit one

But what if you’re concerned about a layoff instead of a raise? You’re not alone.

The April 2023 jobs report showed growth was robust, especially in certain sectors, like professional and business services or healthcare, but the Bureau of Labor Statistics revised their initial estimates for February and March downward by a significant amount – meaning that companies will be attuned to ongoing uncertainty about our country’s financial picture. And while reports of layoffs seem to have slowed overall, at least for now, many sectors, like banking and tech, have continued to report ongoing job losses.

What does this mean? Currently employed workers need to know how to negotiate severance, should they lose their jobs – and those who are seeking employment may feel pressure not to negotiate if they are in a field where openings are more scarce.

If you’re entering a job, negotiate severance in advance. More and more executives are making this negotiation a part of their entry to the company rather than their exit. And it makes sense: the company really wants you, so your leverage is high. Let the company know that like a marriage – you’re expecting a long, happy relationship – but increasingly, it’s becoming standard to negotiate a contract so that if there were an exit, everyone knows what’s expected.

And if you’re being let go, do not accept a severance offer on the spot. Take your time – even internal deadlines can be negotiable. Under federal law, professionals over 40 years old have 21 days to consider their offer, and even longer if you’re in a group layoff situation.

You also have 7 days after accepting to change your mind. Consult everyone in your network about the most generous package you can advocate for, and hire a lawyer or other professional if you need one.

Make sure you’ve thought about all the monetary “buckets” that could be part of a settlement, such as: overall severance pay terms, payment for unused sick/vacation days, continuation of insurance benefits, stock (whether accelerated vesting of options or actual restricted stock units), a pro-rated bonus, or even the acceleration of a promotion, if you had one coming soon. And think creatively about additional non-monetary things you might need, like resume building or LinkedIn help, that the company might be able to provide.

Whether you’re asking for severance or asking for more salary, you can negotiate effectively by following three quick strategies:

First, ask good, open-ended questions, starting with “What,” “How,” or “Tell me,” that give you the most information. (“Tell me the raise process for this year. What else can the company offer to bring my severance package in line with my 10 years of contributions? How can I help you make the case?”) People who ask the best questions make the most money.

Next, land the plane. What does that mean? It means let there be silence during your negotiation. Sometimes we over-talk when trying to ask for more. State your position, ask your question and then … let them think about it! Recent research shows even 3.5 seconds of silence can lead to a high-value move from the other side.

Finally, know this: if everyone in the room isn’t a little uncomfortable, you haven’t asked for enough. Their discomfort is not your emergency. Even in the toughest economic times, I’ve talked to hiring and HR managers who tell me there is always room to negotiate.

If you’re someone who routinely undervalues herself, I want you to remember this and add at least 10 percent to your request, maybe 20 percent! As women, we often feel pressure to be likeable, collaborative and even grateful in the negotiating room, but you can be grateful and also know your value.