Salary Negotiations: This Mistake Could Cost You $100K+

Don’t let this happen to you!

Michael gets an amazing offer

Michael jumped when offered an opportunity with a promising startup. In a heartbeat, he left a job that was lucrative and secure and moved halfway across the country to get in on a chance to get equity in this company. He had, of course, done his due diligence and found the company to be solid.

He pulled the kids out of their circle of friends and relocated. The new job was fabulous, and Michael immersed himself in the work.

Then things went wrong 

For the first ten months, the company lived up to his expectations. But things went south really quickly. A competitor made the news when they were found to be engaging in very unethical business practices, and the bad publicity rubbed off on his company, even though they’d done nothing wrong. The explosive growth stopped, and soon, they were losing money.

Michael gets laid off

One day, Michael was summoned to a conference room and informed that the company was going to have to lay off several people—including him. Michael got a grand total of three weeks severance—after moving over 1300 miles to take the job. The company also provided stingy “outplacement” assistance that consisted of a lecture on how to write a resume. He learned nothing new. 

Looking back on the experience, Michael says he should have asked for more, but he was in a state of shock.

A long job search 

Michael was so devoted to the job and the company, that he hadn’t thought about taking steps to build a local network. Building a network from scratch was difficult and very time consuming. After floundering in his job search for several months, Michael enlisted our help. 

It took about two and a half months to land his next job. Total time unemployed was around eight months. 

With our help, Michael and his boss agreed to a compensation package that protected him. This included several months of severance, a good outplacement package, and an extension of his medical benefits.

Salary Negotiations Lesson? 

Put severance on the table during salary negotiations. Many people don’t feel comfortable asking about severance, but the alternative is to end up in the same sinking boat that Michael found himself in. 

What Should You ask for during salary negotiations? 

Typically, companies will pay one or two weeks severance for each year of service, outplacement, payment for accrued vacation, and an extension of medical coverage. However, a top executive might negotiate several months severance, particularly when there are special circumstances like Michael’s where he moved a great distance to accept the position. 

Finish off Salary Negotiations by Getting It in Writing

Any time salary negotiations extend beyond salary and a standard benefit package, it’s a good idea to protect yourself by getting a written agreement. Should the company official object, tell them something like this, “It often happens that people in the same conversation come away with a different understanding of what was discussed. I’m excited about working here, and it would be a shame to start off badly because we’re not clear about exactly what we’ve agreed to.”

Should the boss still refuse, you can send the boss a letter summarizing your agreement. This letter can be enforced as though it were a contract.

Don’t worry that you’ll sound ungrateful or even desperate

Getting an agreement about severance is smart—and it can save you many thousands of dollars if things change at the company. 

Want to discuss your job search or job situation? Here’s a link to my calendar:

https://calendly.com/lucrative-careers