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Negotiate Your Exit Pay Before Taking a New Job

 By Perri Capell, Career Journal

Question: I am expecting an offer for a human-resources director's job paying between $70,000 and $80,000. At my last two jobs, I was let go with inadequate severance pay after reorganizations. Should I ask for an employment contract? If not, what should I request in writing in case of a management change?

Answer: It probably won't do much good to ask for an employment contract specifying severance because these agreements rarely are given to someone at the mid-management level, says Alan Johnson, managing director of compensation consultancy Johnson Associates Inc. in New York City.

"You don't get that type of contract unless you're a vice president or higher," he notes.

But your prospective employer may agree to provide you with extra severance pay in case of reorganization and to put these terms in writing. Just be sure to negotiate this before you accept the job, when you have the most leverage.

If you haven't done so already, research the severance policy at this company. At your level, you likely won't qualify for special severance packages offered to executives, so find out what employees are eligible to receive after one or two years of service. Locate surveys that can tell you the length of typical severance payments. Amounts often vary by industry, so look for information about your particular industry, notes Fran Luisi, a principal with Charleston Partners, a Rumson, N.J., executive recruiting firm.

Armed with this information, discuss the issue with the relevant hiring manager after you've received an offer and before you accept. Be direct about your concern. Say that your past two employers laid you off following reorganizations without adequate severance and that you would like be protected against this in future, says Mr. Johnson.

"Be honest and say you were let go twice for reasons that weren't your fault, and so this issue isn't just theory for you," he says.

If the company's standard severance pay for new hires isn't sufficient, ask for more. If your manager agrees, have the amount you would receive put in a letter. Typically, such a provision would expire in a year or two, says Mr. Johnson. You can make the point that the agreement won't cost your employer anything if it doesn't expect to reorganize or be acquired, he says.

Of course, your future employer may not agree to your request, but it doesn't hurt to ask, especially if you explain why you're so concerned, says Dick Gast, president of Richard Gast & Associates Ltd., a Lake Forest, Calif., recruiting firm specializing in HR.

Be sure to research the company's financial stability and outlook before you decide to take the job, Mr. Gast suggests. Find out if there are any suggestions of a pending acquisition or takeover. HR folks are expected to be knowledgeable about hiring practices and negotiating but some don't do adequate research during their own searches, the recruiter adds. "It's like the cobbler's kids going without shoes," says Mr. Gast.