You may have read recently that Americans are quitting their job in record numbers. A recent Yahoo Finance article (Myles Udland, “Americans are quitting jobs at the fastest pace in 16 years,” March 16, 2017) mentioned that this means that the economy is improving, because employees who quit have more confidence they can get another job/opportunity pretty quickly. But there is a dark side to this news: most people who quit their jobs simply are simply sick of them, and have reached their BS threshold. Generally speaking, it’s not logical to just quit if you don’t have another job lined up.
There is a right way and a wrong way to quit your job. If you don’t already have a job lined up, you should be aware of factors such as medical insurance that can be problematic if you aren’t working (we discuss these below). Also, no matter how you feel about your boss, your company, or the team you are leaving, never, ever resign without notice; it is immature and unprofessional. From the standpoint of pure self-interest, don’t pee in a fountain you may have to drink from again; a lot of employees return to the same company at some point in the future.
If you’ve been following this blog, you know that we strongly advocate for employees to take an active role in negotiating their severance packages when being fired or involuntarily terminated. But what if you just want to resign/quit? Can you still get severance? Yes, it is possible. “How is that possible?” The long answer short is that you have nothing to lose, and there are some scenarios where you can resign and are still able to negotiate severance, or some other sort of transition pay like a cash bonus. Let’s look at a few of these scenarios.
Scenario A: You hate your job. You hate your boss. Your boss hates you. PERFECT! If you are ready to quit, what do you have to lose? And if your boss really does hate you, he/she is already thinking about how to get rid of you. So, you can make it easy for him, and possibly get some money in the bank along the way: schedule a meeting, tell him you’ve been thinking a lot about your job, and you feel it’s just not working out, based on how he has been treating you or other adverse factors you can cite concretely. Depending on how this conversation goes, you could open a line of inquiry to see if you may be eligible for a “mutual separation,” with transition pay. For example, you could say:
“[John/Joan], I’ve been thinking a lot about my role on your team, and about our working relationship. I think we both know it’s been less than ideal, particularly since you [provide a concrete example, like recent performance review, or team friction, disagreements at work, etc.]. I want you to know that I’d be open to discussing a transition plan, and will commit to an orderly transition of my responsibilities, in exchange for severance or transition pay. Can we explore a mutual separation plan? I can get on with my life and job search, and you can get someone on your team that really is in synch with your goals.”
That way you give your boss an out, and you don’t commit to resigning, which can be a one- way street with no turnaround. Your boss will probably talk with HR, and they’ll tell him/her that a mutual separation is a good alternative to a forced resignation or a performance plan. Keep in mind that a severance agreement provides cheap insurance for companies to insure you won’t sue them in the future. Virtually all severance agreements are carefully worded legal documents that ask you to sign a “release from all claims” against the company, now and forever, in exchange for severance pay or other benefits. Again, if you are about to quit, you have NOTHING to lose.
Scenario B: You’ve decided you want to leave. Either you hate your job, or you’ve received another offer, or you just want to do your own thing and start your own business. Are you in a critical role? Would your company/boss/team panic if they knew you were leaving right before a major deliverable is due (like signing a major customer contract or finalizing quarterly filings, etc.)? If the answer is yes, and you time it right, you may put your company in such a difficult position by leaving that they are willing to pay you extra to stay for additional time. That conversation could go something like this:
“[John/Joan] I’ve decided to resign, and would like to give my two week notice. I know the timing isn’t good, but I really need to move on, and will be taking some time off.”
If your boss panics and asks you to extend your notice period- by even a few days- tell him you are open to it, but there is an opportunity cost to you because of a trip you have planned (or some other reason), and if you did stay beyond the two-week notice period, you’d need a retention bonus or additional pay (like 150% of regular pay rate for any time beyond your two-week notice). The more critical your role in the company, and the closer to some major milestone you can time it, the more leverage you have. It’s not unusual for companies to pay employees retention bonuses to stay a few extra weeks (or even months). Be aware that retention bonuses are pretty common, but they generally are tied to specific deliverables, and as such, may be at risk if you don’t complete the deliverable or stay for a pre-determined time period. If you are in a role where your sudden departure would severely impact the company, you should explore getting a retention bonus or a higher pay rate to stay beyond the standard two-week notice period.
Scenario C. You’re done. You aren’t in a critical role, and you don’t have any particular leverage to negotiate a package. You just want OUT. No matter how you are feeling, or what your job experience has been, take a step back and consider a few things carefully before you quit. First, give two weeks of notice (or more, if you have a contract or collective bargaining agreement specifying a notice period). Even though there is no legal requirement to give notice, it’s considered a common market practice, and if you abruptly quit, no matter how good it feels, it’s almost always the wrong thing to do. Quitting with no notice is sure to negatively impact your professional reputation, not to mention leaving your teammates and manager in a tough position. By the way, many companies won’t allow employees to take vacation during their notice period (so that they can have some transition time with your replacement), and will pay out any accrued, unused vacation time you have with your last paycheck. Even if they do, it can be crappy to resign, give two weeks’ notice, and then take vacation for two weeks. Most companies expect their employees who resign to at least make some effort toward effectively documenting and transitioning their work to other members of the team.
Second, consider your timing. Most companies that offer employer-sponsored medical benefits pay the premiums at the first of the month, and thus if you quit on the 1st or 2nd day of the month your benefits will have already been paid for that entire month (confirm this with your HR department if there is any doubt). While you can go on COBRA to continue your medical benefits after you resign, medical insurance premiums can be very expensive, so if you are going to resign and aren’t immediately going to be working, try to time it very early in the month. This applies to medical insurance, not life or accident insurance, which normally end on your last workday. Also, many companies pay bonuses, and you may be required to actually still be employed by the company on the day the bonus is paid, not just the quarter or year in which it is earned. For example, your company may pay an annual bonus earned in the year that ends December 31, but actually make the bonus payment in late January or even February. Check your employee handbook or bonus plan document carefully to see if you actually have to still be employed on the day the bonus is paid to be eligible. The same goes for other benefits that accrue with length of service, such as stock vesting or pension vesting – always check your benefits plan documents and confirm any questions with HR.
Third, don’t burn any bridges. As many as 5-10% of employees return to a previous firm a second time, as so-called “boomerangs.” Leave on good terms, even if you have another job lined up or don’t plan on working again; you really never know. Before you leave, be sure to confirm with your company HR department whether or not you are “eligible for rehire.” This usually refers to a code that is entered into your employee data record when you depart, and some companies have very strict policies on not hiring previous employees, while other companies actively seek to regain lost talent. Many companies will consider having employees who have retired come back as part time employees, to take advantage of the experience and skills they have accumulated over a career.
Finally, if you resign or quit voluntarily (vs. getting fired or being laid off), you won’t be eligible for unemployment benefits. However, if you are able to negotiate a “mutual separation,” you likely will be eligible for unemployment. If you receive severance pay or sign a severance agreement, most unemployment departments will take that as proof that you were laid off or the company eliminated your position.