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layoffs this year Most have been confined to the hardest hit sectors of the economy, particularly tech. But depending on your industry, if the economy declines more sharply in 2023, you could find yourself face-to-face with layoffs, and it’s not always clear what you should expect from your former employer sooner. Must be expected as they go to you.
Recent headlines show just how widespread corporate layoff policies can be slash-and-burn approach Some leaders are going to publicly reveal the pain raised by Elon Musk on Twitter letter about job cuts To outline the various benefits being given to the departed employees.
Layoffs are a coveted issue for companies when the American public ranks how businesses treat their employees as the most important ESG issue, according to annual polling conducted by Just Capital. Living wages, training and career advancement opportunities, employee safety, and diversity all factor into human capital metrics, but that doesn’t mean companies get a free pass about downsizing the workforce. “The layoffs can be done in a reasonable way,” said Martin Whittaker, Founding CEO of Just Capital.
Paul Wolfe, former head of HR at Indeed, said, “My general philosophy on letting people go is that you want to treat people well because it all goes back to your brand, and employer brand is very important in today’s marketplace. Is.” Counseling Centre. “Exited people are still talking about your brand,” he said.
But there’s a big problem: Many workers don’t know how to evaluate a job-severance agreement; in fact, they can’t tell a fair layoff from an unjust layoff. Here are some recommendations from career experts for the employer-employee conversation, but it’s better to prepare for it in advance.
Don’t sign anything the first time you are informed
A very important piece of knowledge to get started: You do not need to sign a separation offer. In fact, career coach Fiona Bryan’s No. 1 advice when offered a layoff is not to sign any documents on the spot when you’re first informed.
“This is a really emotional time, and, legally, your employer has to give you notice of how long you have to sign paperwork,” said Bryan, a career expert and senior managing partner at Ask Bryan Group. . , “Take the proposal away and read it. Ideally, take it to an employment attorney, and offer some short, free consultations.”
“It varies on the company, but generally, you will have 21 days to sign your offer of layoff,” said Tony Frana, a career services manager at FlexJobs, a subscription-based job site for remote and hybrid roles. Said.
“You can always negotiate the package,” said Andrew Challenger, senior vice president at outplacement firm Challenger, Gray & Christmas. And he says employees are more likely to succeed in this environment as opposed to a sudden, severe downturn such as the Covid crash, a situation in which many companies have hired in a slowing economy. “It’s not a panic, it’s not a falling knife,” he said. He added that negotiating will not benefit employees as much as when they accept a job offer, but that “now is a better time than a major crisis”.
After you’ve had time to process the emotional, financial and mental changes, here’s how to know whether your company’s layoff offer is a good one, and whether it’s time to negotiate a better one.
How you take severance pay matters
When it comes to severance pay, Brian recommends that people identify whether it will be paid in a lump sum or whether the company will keep them on the payroll as they deposit money into their accounts.
“If it’s a lump sum payment, sometimes it’s better to get your layoff money and get a new job,” Brian said. “But sometimes there is a benefit for people to remain on the payroll so they can continue to list their continued employment with the company on their resume.”
If you’re still receiving checks from the company, like Brian said, you can still say you’re employed by the company on your resume. This is especially important if someone has only worked at the company for a short period of time when they are let go, and they may have listed active employment for some time.
how much money should you expect
Most companies that offer severance pay are based on tenure at a company. Frana said the general rule of thumb is that companies offer one week to three weeks of severance pay for each year you work at the company.
If you’ve worked for the company for a year, you can get one to three weeks’ pay. But if you have been with the company for 10 years, you can get salary for 10 weeks to 30 weeks.
“If you were valuable to the company, you may be able to get additional funding, or demand additional funding,” Bryan said. “But two years of severance pay is usually the maximum. In my history of doing this, I don’t think I’ve heard of anyone going over 24 months.”
Evaluate recovery and severance together
How much you get paid, how quickly your health benefits end, is another part of the company’s layoff proposal.
“I’ve found [health benefits] go through the month while the person is still on the payroll,” Bryan said. “So it’s another difference if someone stays on the payroll, or if they’re paid a lump sum.”
If you’re on the payroll for two months, or a year, for your severance pay, often your health benefits coverage will continue as well, Bryan said. But if you take a lump sum, it’s difficult for a company to keep up with your healthcare coverage.
“That’s the way insurance companies work. If a person isn’t an employee, the company can’t pay their insurance premiums,” Bryan said. “Whereas if you are still on payroll and you are being paid your regular salary, a company may also pay your insurance premiums.”
Some companies are offering more in the current tough labor market. In its most recent layoffs, fintech company Stripe said it was offering the cash equivalent of six months’ existing health care premiums or health care continuity.
In the US, no matter how or if you are offered severance pay, Labor Department requires companies To offer temporary continuation of health benefits previously granted to individuals while working for the company. This is usually at the expense of the employee, and it is required under cobraor the Consolidated Omnibus Budget Reconciliation Act.
While every company is different, they will offer temporary coverage for roughly two months, Frana said. But these continued health benefits are not offered at the same rate that you were offered as an employee, and they can be expensive for someone who was just laid off.
Challenger said the “headline number” of total weeks of severance pay is the hardest to negotiate, but outliers like health care are being kept on the payroll longer, and asking for better terms for employees in PTO. There may be room for more.
Career help to negotiate a deal
While severance pay and health benefits are important, there are additional resources that companies may offer in your layoff package, and some you can negotiate for, if not offered initially.
It’s not necessarily important to help employees learn about the parts of the package that don’t cost money or set a major precedent, Bryan said, because HR usually doesn’t want to do that.
Outplacement benefits, such as resume reviews, career coaching and interview training, are key resources that companies can offer in their severance packages.
These are among the resources people need most to help them bounce back in the job market, said Lisa Rangel, founder and CEO of Chameleon Resume, a resume writing and job landing consulting company.
“If the company isn’t offering them directly, you can negotiate for them yourself,” Rangel said. “Or if they’re offering a blanket, general displacement benefit, you can also negotiate what custom services would benefit you and see if they’ll do that.”
Other resources may include connections to the company’s alumni network and even access to internal resources such as attorneys to assist with legal needs. when online payment company Stripe laid off employees in November, they offered former employees alumni email addresses as well as career support and immigration support. The latter is especially important for foreign visa workers whose residency in the US is dependent on holding a job.
While these services typically aren’t offered by every company, Brian said an employee should always ask for what they need, and it helps if the cost isn’t too high. If you are not offered what you need or feel you deserve based on your tenure and performance, she said that like a job offer, everything is negotiable.
Wolfe said that the work of a company goes beyond maximizing financial profits. As a human resources leader, she said in the face of a layoff, “My job is to help you as much as possible and help you get your next gig and companies, if they care about employees, want to help.” “
“If you haven’t been in a layoff situation before, negotiating may not be something you automatically think about,” Frana said. “You can always try to negotiate, whether there is room for negotiation or not, you don’t know until you try.”
While being laid off is never ideal, and often not expected, Brian said you should always advocate for what you need and deserve.
“Severance packages can be good when you know they’re coming and you’ve made some plans,” Bryan said. “But re-entering the job market takes resources, and it helps when you’re well-prepared so another company can scoop you up.”