How much should I demand for compensation on an extension?

March 8, 2019 11:24 PM

My company announced my division would be laid off, and my employment is set to end in six weeks. My employer is now discussing offering me an extension to assist them in the re-organization, as they planned poorly. How much should I be demanding in compensation?

You are not my lawyer. I have my own to read through contracts and agreements. I'm not asking for legal advice. Anonymous because my main is no longer secret.

I currently work for an company's end user support team as a subject matter expert and tech support supervisor for a multi-billion dollar company. In a cost-saving re-organizaiton attempt, our entire department was given 90-days notice in mid-January, and provided us with a sub-par severance agreement. I've had the agreement checked by a lawyer and have already signed. As of mid-April, my employment will be considered terminated. There is no language in the severance that would require I stay beyond the agreed termination date without express agreement by both the company and myself.

My company now realizes that their time frame for closing our department was rather unreasonable, and is beginning to offer extensions to some employees to assist further with the re-org, and I'm high on the list. For me, that will mean switching from my role where I am subject matter expert for all products and deal with call center operations, and transitioning to 40 hours/week of single-tier phone and e-mail support for multiple lines of business while my replacements are trained. I will be working a job solo that is typically handled by a team of 4-5 call center agents. The work is going to be soul-sucking and exhausting, but also well within my skills and abilities. The estimated extension could be anywhere from 4-13 weeks with specified beginning and end dates. I don't anticipate an extension more than a couple of months.

To that end, I'm trying to determine how much I should be demanding as incentive to stay. The extension will be for a 40-hour week with no overtime, which is what I currently work. I have been told to expect my salary will remain the same, but I will be offered an incentive bonus on top of my salary as compensation for an extension.

I currently make mid-$70's in this job, which I've determined is under the market for the position and skills (realistically should be $90K-105K). I'm in an unusual position in that there is, quite literally, no one else who can fill this role while the call center undergoes training to become my replacement. Business in multiple LOBs will be lost without someone to fill in. And because my severance is locked in regardless of whether I extend or not, I feel like I have all of the leverage in any negotiation. I do not yet have a next job lined up, and am in preliminary discussions with one potential employer.

Lastly, I feel no obligation or loyalty to the company I work for, beyond the duties of my employment and severance agreements, both of which I am fulfilling.

My question is fairly simple: How much incentive pay should I demand to stay on for my company that has elected to lay me off? Do I demand 25%? 50%? 100%? More? What other terms or conditions should I consider for a potential extension?

posted by anonymous to Work & Money (15 answers total)

At least double the pay. I personally would not even take that.
posted by crazycanuck at 12:44 AM on March 9, 2019 [9 favorites]

I can calculate the case for $100/hr fairly easily: $70K = 35/hr, double that: $70, plus 30% either for taxes if you're 1099, or as a convenience fee if you're still W2, equals $100/hr. But I think you should ask for $150 or even $200, SME that you are, short that the committment is, and for just having to deal with it at all. You also have the ability to make up for being underpaid.
posted by rhizome at 12:52 AM on March 9, 2019 [6 favorites]

How much would they be paying those 4-5 people who usually staff the call center?

I’d ask about that with a multiplier - perhaps 2 - to acknowledge that this is a truly exceptional request.

And I’d ask for them to pay your Cobra insurance and yes, the fun taxes involved with a 1099.
posted by sciencegeek at 2:17 AM on March 9, 2019 [13 favorites]

I agree that you should demand a rate that might be very surprising to you under other circumstances. Scandalous, even. Aside from remuneration for work performed, there is also an opportunity cost, as you’ll be working a dead-end job instead of looking for a new one. So, by my calculation, at a base rate of $50/hr (that’s the $110k/yr you should have been getting, salaried), times the expected-workload multiplier of 4, plus a gross-up for taxes of 50%, brings me to $300/hr. For a subject matter expert being brought in as a specialist to provide training and perform work that will serve as the basis for ongoing company operations for a large enterprise, frankly, that’s a pretty good deal. They’d pay a LOT more than that to McKinsey or KPMG, for example.

This is key: at this rate you are providing a bargain. Maybe you would accept less, but that doesn’t make $300/hr any less of a bargain.

Please also keep in mind the idea of price anchoring. The sooner you show up with a big number, the better, so they won’t be able to anchor negotiations at a small one. If they balk, let them come back to you with a counteroffer. If they accept without protest, then I apologize for not encouraging you to demand even more. :)
posted by TheNewWazoo at 5:10 AM on March 9, 2019 [21 favorites]

As for other terms, that’s pretty wide open and depends on what you’re okay with. Usual points of negotiation include:
- where is the work to be performed
- what is the term of work, and how/when will it be extended
- who owns assets and IP created during the course of the work (perhaps you want to turn this into a consulting career?)
- payment terms: net-15 is great, net-30 is standard, net-90 sucks for you but big companies can get away with it because they have leverage
- billing terms: hourly? milestone? per deliverable?
posted by TheNewWazoo at 5:17 AM on March 9, 2019 [1 favorite]

I was going to, off the cuff, sling out $200/hr. But, following my finely-honed estimation guideline of “if someone says a bigger number, agree with it,” I’d say that $300 is fine. Don’t negotiate, because they have plenty of weasels that will latch onto that, and pick a number large enough that if they do agree, you’ll think “this is worth it,” instead of “damn, I should’ve asked for more.”

Sounds like you can make it a win/win situation. Good luck.
posted by Gilgamesh's Chauffeur at 7:19 AM on March 9, 2019 [2 favorites]

I'm with TheNewWazoo here. Remember that you are also sacrificing time that would have been spent to search for a new job.

I'd ask for $300/hr and a year of COBRA prepaid before you begin.
posted by JoeZydeco at 7:20 AM on March 9, 2019 [10 favorites]

Up front try to negotiate for at least a 20k bonus upon completion of the extension and three months severance pay.
posted by nikaspark at 8:01 AM on March 9, 2019 [4 favorites]

If you have a specified end date no later than 13 weeks, and you're going to agree on an end date up-front, and you're only negotiating bonus rather than salary - I'd ask for 6 months salary on top, payable up-front with an insurance extension to match.

You don't mention what your job prospects look like after this or whether you've done any searching. You mentioned the current severance was sub-par. So I'd be looking for a more equitable severance and insurance to cover me over the period of time I'd likely need to find a new job.

I'd make the severance payable before beginning this new period of work, simply because you have no reason to trust this organization will pay out after the fact.
posted by jzb at 8:03 AM on March 9, 2019 [6 favorites]

Yeah. These numbers are pretty ridiculous. As someone who's left jobs as the only person on planet Earth who could do them, I can assure you that you won't even get to finish your sentence if you go into the room asking for 6X your current rate and/or 6 months salary up front. And you mentioned you were recently part of a team, my guess is that before you left that room there would be call made to one of those former team members. In any case, unless the company literally has to shut the lights off if you leave, there is a breaking point, and I'm sure it's much less than 6 months pay for 4-13 weeks of work.

The way these deals typically go is that essential employees (which is you) continue on at their currently salary, with a bonus paid out at some specified end date. This is where you can negotiate. The last time I went though this, the bonus brought me to time-and-a-half for period in question.

Keep in mind that the "we need you a bit longer" works both ways. Unless the company is run by morons, you likely won't get anything extra until the last day. That makes sure you don't leave for a new job halfway though.
posted by sideshow at 12:18 PM on March 9, 2019 [1 favorite]

Might want to reread anon's question again:

I'm in an unusual position in that there is, quite literally, no one else who can fill this role while the call center undergoes training to become my replacement.

The advice we're giving is 1) you make stupid companies pay for stupid mistakes and 2) you use a high figure as a starting point and work down instead of starting with your existing salary and trying to work up.
posted by JoeZydeco at 12:31 PM on March 9, 2019 [9 favorites]

I would be careful here. I work in the corporate sector and have worked on, in and around mass lay-offs several times (I'm not sure that all the commenters here have). Everyone always thinks they are irreplaceable; it will not take you as far as you think, especially when they are asking all your colleagues as well.

They are offering this to you because it's the easiest, most convenient thing for them. If it ceases to be the most convenient thing (by asking for 6x the salary, for eg), the will just fire your ass and let things fall to wrack and ruin. I have seen this play out. They will just hire more contractors from a contracting company to try and address the shortfall, acknowledge that it's a crappy stop gap and move on with their lives.

There is no question of setting a new base - they already have a base in mind which is your current salary, and all negotiation will be based from that point.

In similar circumstances I have seen bonuses for this kind of thing fall somewhere between 5 and 15k, dependent on a lot of factors but usually settling somewhere around that 5-10k mark.

Best of luck.
posted by smoke at 2:17 PM on March 9, 2019

I'd go for 3x your current rate, personally, with no retention clause (so you can bail out if you get a better job). If they want you to skip better offers then I'd go for 3x with a bonus that you lose if you terminate before a given date, but which you keep if they terminate.

...and if they balk, just walk away. This is just business, nothing personal.

You're not irreplaceable, but neither are they, so their deal has to be worth your time.
posted by aramaic at 3:30 PM on March 9, 2019 [1 favorite]

Taking into account what the company spends on a single fully-loaded employee making e.g. $50-70K, even $40K for 13wks (one fiscal quarter) is less than what an extra one of OP's laid-off colleagues would cost on salary, and a staffing agency would certainly charge over $100/hr, though the company would more likely have to hire an SME consultant who coincidentally doesn't know the company's systems or business, so the time estimate would have to be thrown out (cf. the conjoined triangles of success) along with paying agency rates.

I'll speculate the boss has more to worry about in blowing their deadline than they do an extra $50,000 or whatever. Does anybody think the boss is going to want to dive back into their Rolodex over these numbers (assuming OP's qualified colleagues don't already have new jobs)? I'm also under the impression that multi-billion dollar companies do not even blink at a number like this, even under "cost-cutting" terms, and at any rate it's not even the boss's money.

FWIW, 50% more than $40K is $60K, which is pretty close to $1000/day for 13 weeks. In a situation like this, I'm thinking it's likely that the boss will OK pretty much any number up to the limit of their signing authority just so it's off their plate, and OP's ability to be trusted to keep it off their plate has value, moreso under time-constraints.
posted by rhizome at 3:46 PM on March 9, 2019 [3 favorites]

Force them to make the first offer. That offer will then be the floor for your offers negotiating up. There is no way you will get less than their first offer. Never, ever, ever negotiate against yourself.
posted by wnissen at 9:21 AM on March 11, 2019