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Negotiating severance pay.

Few professionals today will spend their entire career at one company. Downsizings, reorganizations, mergers, and acquisitions will force many out of a job, maybe even two or three. And although many companies provide severance pay, a 2005 Lee Hecht Harrison survey reported that minimum severance amounts have remained about the same at all levels of employment, while averages have fluctuated only slightly. "With workforce conditions as they are, professionals would be wise to negotiate their severance pay [even before they start working]," says Joset Wright, vice president and managing director of The Hollins Group, an executive search firm with offices in Chicago, New York, and Atlanta.

Wright offers the following tips:

* Ask up front. The best time to negotiate severance is before accepting the job. Severance, like salary and benefits, should be decided at the time of hire and included in the job offer letter.

* Ask for more. Typical severance is one to two weeks' salary for every year of service. Review what the employer offers and consider asking for additional compensation that could include accrued vacation pay, outplacement counseling, extended health and life benefits, or the opportunity to buy employee-discounted stock options.

* Ask again before you accept. Even after receiving a pink slip and a severance offer, employees have one last chance to negotiate a package that will help compensate them for their income loss. Federal law gives affected employees 21 days to consider the offer before signing it, and after signing it, seven days to change their mind. Wright suggests, "[That] would be a good time to ask for all you can."--Marcia A. Reed-Woodard
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Title Annotation:ACTION PLAN
Author:Reed-Woodard, Marcia
Publication:Black Enterprise
Date:Mar 1, 2007
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