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How to prepare for a layoff

How to prepare for a layoff

When there is a downturn in the economy, it is not uncommon for many companies to begin laying off employees. Generally, companies begin laying off people who have been there the shortest time. Often, this means that people in their 20s are the hardest hit demographic when it comes to layoffs.

Consider looking for warning signs, such as a decreasing client base, no annual raise, or not getting paid on time. Even when times are good, you should be ready to handle a possible layoff. There are five specific ways to prepare for a layoff that are relatively easy.

Follow a Budget

When you are faced with a layoff, it can devastate you financially if you are not prepared. It is important to make a commitment to follow a monthly budget and make every effort to get out of debt. You should also carefully consider any loans that you take out, and what would happen if you were not able to pay them back.

If you were to lose your job and already have a budget, it is much easier to make changes to keep your finances under control while you look for a new job.

A layoff can happen to anyone at any time. Make sure to take the proper precautions, such as budgeting, honing your skills, and establishing a network of contacts to assist you in transitioning to your next job.

Keep an Emergency Fund

Set aside extra savings for emergencies. Your emergency fund should cover three to six months of your expenses as it takes most people between three to six months to find a job. Even if you do not have the entire amount saved when you lose your job, you will be able to make your severance and any other unemployment stretch much farther because you have saved that money. It will also help to protect any money that you have saved for retirement.

An emergency fund is just one step in disaster-proofing your finances. It is a safety net that can protect you financially from unexpected life events such as layoffs. When starting an emergency fund, you may want to save money before you pay off debt.

In the event of a layoff, prepare yourself emotionally. Being told that you are no longer needed at a company can be shocking and hurt your self-esteem. Make sure to not take the decision personally, as it’s a business decision likely based on the need to reduce expenses by cutting salaries. Take care of yourself and focus on finding a new position that to advance your career.

Advance Your Skills and Licensing

You should continually be looking to improve your skills and certifications. Take advantage of any additional training or certification offered at your company. You may receive the job over another candidate who has more years of experience but is lacking in the certifications or newer computer skills that your job requires. These additional credentials can also help land you a higher paying job in the future.

Build a Network

Additionally, it is important to continue to network at all times. As you build relationships with those at your company as well as others in the industry, you will establish contacts who can help you find a new job. Most job hires come as a result of network contacts. It may be that you hear about a job through a certain person, or you can use someone as an additional reference.

According to a 2015–2016 survey conducted by The Adler Group and LinkedIn, a select group of job seekers, ranging from active to passive, were asked how they found their jobs. Eighty-five percent of respondents said networking helped them gain employment.

Keep a Positive Attitude

While you are employed, you should stay positive and do your best work with focus and commitment. This may protect you from being laid off, and can also help you to receive good references when you are looking for a new job.

How to prepare for a layoff

How to prepare for a layoff

As the coronavirus crisis escalates, layoffs are sadly mounting. Last week, 3.28 million Americans filed for unemployment, the highest number of initial jobless claims since the U.S. Department of Labor started tracking these numbers in 1967. And Federal Reserve Bank of St. Louis economists say the pandemic could lead to 47 million lost jobs in America.

“Most economists now expect a major recession,” says Jed Kolko, chief economist for Indeed.com. “Some companies have already announced layoffs, and we’ve seen the trend in job postings start to decline on the Indeed site.”

Some of those jobs — hopefully most — will return. But in the meantime, it’s wise to take key steps to prepare for a possible layoff and shore up your career. Here are nine suggestions:

1. Focus intently on your job, while you have one. Admittedly, this is easier said than done. But with layoffs sharply escalating, now is not the time to ease up at work. Otherwise, you could make yourself more of a target to your employer.

If possible, offer to lighten the workload for a co-worker who is sick or caring for a loved one due to the pandemic.

It’s now critical to demonstrate your productivity, especially if you work remotely (when some bosses wrongly assume employees aren’t putting in the normal effort). Respond promptly to emails from colleagues. Show up for virtual meetings on time and well-prepared. Stay on top of deadlines and deliverables.

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If possible, offer to lighten the workload for a co-worker who is sick or caring for a loved one due to the pandemic.

Of course, no amount of diligence will guarantee your job. But it’s your best defense when or if your employer must make job-cut decisions.

2. Update your LinkedIn LNKD profile and resumé to include your latest accomplishments, skills and credentials. Eliminate any information that’s no longer relevant, such as dated technology skills.

If you’re a job seeker over 50, it’s especially important to follow the recommendations noted in my previous post, “How to Age-Proof Your Resume and LinkedIn Profile.“

3. Practice using video technology for potential video job interviews. Odds are, for the foreseeable future, many employers will be using video interviews to screen candidates. If you’ve never used this technology before, it’s time to learn.

Sign up for a free account at Zoom.com or Skype.com, download the software and then schedule some catch-up chats with friends, family or the grandkids. Consider recording your first few sessions to get a sense of how you look and sound on camera and what your in-home environment will look like.

It will be awkward at first, but over time you’ll gain comfort and confidence that should serve you well if you need to interview for a job this way.

4. Call at least three professional contacts each week. With so many people working from home, now is the perfect time to reach out to contacts for good old-fashioned voice-to-voice conversations or video conversations. They could be helpful if you wind up needing to look for work.

Select a few people whose expertise you value or who work at employers that might be a good fit for you in the future. Invite them for a Zoom or phone catch-up call. The point of these calls is not to ask for a job. The goal is to strengthen your professional relationships by having a meaningful and mutually beneficial conversation.

Since many of us are feeling anxious these days, avoid catastrophizing and look for ways to help your contacts, perhaps by making introductions or recommending resources.

5. Get more active on LinkedIn. If it’s been a while since you spent time on LinkedIn, take a half-hour to test drive some of its newer features that can help your potential job hunt. I wrote about some of them in my recent post, “4 LinkedIn Features to Power Your 2020 Job Search.”

Go through your employer’s directory and record names and contact information for colleagues who might be useful moving forward.

Spend at least 15 minutes each day on LinkedIn either posting articles of interest, reading and commenting on pieces your connections post, or introducing two LinkedIn connections who might benefit from meeting.

6. Research job postings to identify “hot” skills and then find ways to quickly acquire those skills if you need them. Sometimes you can significantly improve your chances of getting hired by adding a new skill or certification to your resumé. For example, you might notice that employers are eager to hire people certified in specific technologies, such as cloud computing or mobile development. Fortunately, thanks to online learning sites like LinkedIn Learning, Coursera and Udemy, it has become easier and more affordable to gain valuable skills and certifications.

7. Secure your work-contact lists and files. Your professional network will be the key to a successful job search. If you’re working from home, transfer the phone numbers and e-mails of your valued contacts from your work computer to your personal computer or mobile device. If you’re still going to your workplace, print them out or forward them to your personal email address.

Also, go through your employer’s directory and record names and contact information for colleagues who might be useful moving forward.

8. Investigate job opportunities in your organization. If you work for a large company, nonprofit or government agency, it’s possible that some divisions are continuing to hire, even while others are laying off people. So, if you have skills that might be useful in a different division or department based on internal job postings, discreetly network with co-workers there about potential transfer opportunities.

9. Max out your health care flexible spending account (FSA) if you have one. If you are fortunate enough to have a flexible spending account at work, you can be reimbursed for health expenses, such as eyeglasses and medical insurance deductibles, incurred through your date of termination — even if you haven’t fully funded your annual benefit.

For example, say you elected to put $1,500 into your FSA, but as of your upcoming termination date, you only contributed $750. If you incur $1,500 of eligible expenses by your end date, your employer must reimburse you the full amount. On the other hand, if you’ve contributed more than you’ve spent by your termination date, you’ll lose any excess balance in your account.

So, do what you can to maximize those reimbursable expenses sooner rather than later.

Nobody is immune to layoffs. Whether you’re an executive or an entry-level hire, layoffs can—and probably will—affect you at some point in your career. Consultants and freelancers have a bit of a buffer thanks to their multiple income streams, but when their industry suffers, they suffer too. (There’s nothing like losing four clients in a single month.)

However, you can inoculate yourself against potential job loss by learning how to anticipate layoffs, how to handle your finances when you suspect layoffs are coming, and how to leverage your network to keep your career going even after your employer lets you go.

The Employees Who Are Let Go First During a Layoff

We’ve told you how to prepare if you think you’re going to lose your job, and this tool will even…

Know how to predict layoffs

Although some types of layoffs feel like they came out of nowhere, companies often give clear signals that layoffs are on the way. Sometimes these signals are obvious—your company merged with (or got bought out by) another company, your company had its worst quarter ever, other departments start laying people off—and sometimes they’re more subtle.

Alison Green, of Ask a Manager, suggests you keep your eye out for the following indicators:

  • Penny-pinching: Are travel budgets being cut? Is the office coffee no longer free?
  • Postponed projects: Do you have less work to do than usual? Are you hearing things like “we’re not going to move forward on that just yet?”
  • Restructuring: Are you hearing rumors about new org charts? Are people being asked to take on additional work that’s usually covered by another role?
  • Hiring freezes: If companies stop hiring, they might start firing.

“There’s no way to guarantee you’ll be able to spot it coming, because employers usually play it very close to the vest when they’re considering layoffs,” Green explains. “In fact, many companies will continue to insist they don’t intend to do layoffs right up until the moment they’re doing them. So often they’re not going to make it easy for you to know what’s coming, but in many cases, if you pay attention you’ll see signs.”

How to Prepare If You Think You Might Lose Your Job

If you’re starting to get an unnerving feeling that your job is on the line, you can do a lot to…

Get your finances in order

In an ideal world, you’d have a robust emergency fund to tide you over between periods of unemployment.

We don’t all live in that ideal world. Maybe you had some unexpected expenses in the past year, maybe you’re focusing on paying off student debt, and maybe you’ve been saving 10 percent of your income every month but you haven’t quite hit emergency fund level yet. (If you save 10 percent of your income every month, it’ll take 30 months to build a three-month emergency fund.)

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Erin Huffstetler is a writer with experience writing about easy ways to save money at home.

If you think your company might lay you off, take these steps to prepare.

Get Organized

How to prepare for a layoff

You can’t assess what a layoff will do to your financial situation if you don’t know what your financial situation is, so now’s the time to conduct a thorough review of your finances and get them in order by setting financial goals, tracking your spending, creating a budget, and determining your net worth.

Start an Emergency Fund

If you’ve been meaning to set aside three to six months living expenses, but still haven’t gotten around to it, now’s the time to play catch up. Open a money market account or a high-yield savings account, and get that emergency fund going post haste.

Cut Your Spending

Find ways to spend less on necessary purchases and delay all unnecessary purchases until you feel the layoff risk has passed:

Create a Bare-Bones Budget

Make a list of your necessary expenses, and total them to determine how much money you really need to survive.

Get Rid of High Interest Debt

Transfer high-interest credit card debt to a low-interest card to minimize your debt burden. Then, form a plan to zap it as quickly as possible:

Stockpile

Stock up on sale-priced food and toiletries now, and you’ll have plenty to fall back on later:

Consider Your Health Insurance Options

If your family’s health insurance is attached to your job, you should start exploring your options now. Is your spouse eligible for coverage through his/her employer? Do you belong to any organizations that entitle you to coverage? How much would a private policy cost? What about COBRA? Does your state have a plan that you’d be eligible for?

Find Ways to Bring in Extra Money

You can never have too much money in the bank – bad times or not. So, do what you can to speed up your savings efforts – sell off your clutter; take on a part-time job; pick up a paper route. It all adds up to extra piece of mind:

Start Doing More for Yourself

Paying someone else to mow your lawn or change your oil may seem worth the cost when you have the money to cover it; but when times are tight, they should be some of the first expenses to go. Do more for yourself, and save more for yourself:

Plan for a Career Change

Don’t wait for disaster to strike before you start looking for a new job. Update your resume; develop new skills; reach out to friends and colleagues in your network; and apply for any job that interests you.

Know What You’re Entitled to

Will you get a severance package? Will you be paid for unused vacation time? Will you be eligible for unemployment checks? How much will they be, and how long will they last? Research the answers to these questions now, and you’ll know exactly what you’re entitled to should a layoff occur.

by Gary Foreman

How to prepare for a layoff

Everyone should be prepared for a layoff, regardless of which industry you work in. These steps will guide you in financially preparing for a layoff from your job.

editor’s note: This page is a step-by-step process to help you prepare for or survive a layoff. Please don’t just read it quickly and think that you know the topic. It’s important to consider your circumstances and make the necessary changes. Naturally, we hope that none of our visitors suffer a layoff. But, we’re also wise enough to recognize that’s not likely. So we offer these steps to help you in preparing for a layoff and surviving a challenging time.

1. Don’t deny the truth. You could be facing a layoff.

Denying the danger to your income will not make the problem go away. Facing the truth gives you a better chance to be prepared for whatever the future may hold.

2. Make yourself too valuable to layoff.

As companies go through layoffs those employees that remain need to be capable of handling more than one job. Look for opportunities to learn new tasks at work.

3. Take classes to learn new skills.

Many fields are developing new ways of doing things. Unless you continue your eduction you’ll be left behind. It may mean taking some classes from your professional organization. Or a trade school. Or you might even need to take some college classes. Even if the new skills don’t help you avoid a layoff, they’ll make it easier to find the next job.

4. Evaluate how hard it would be to survive a layoff financially.

Will you be eligible for unemployment? How much would you get and for how long? You’ll find information regarding the state pages covering unemployment here: How to Claim Unemployment Benefits.

5. Stockpile non-perishables.

Fill your pantry before a layoff. You’ll find more information about stocking your pantry here.

6. Refuse to take on new debt.

Now is not the time to buy a new car or take an expensive vacation. Even if you could afford the payments today, they’ll become a problem if you lose your paycheck.

7. Pay off debts.

Especially credit card debt. Squeeze your expenses or find new sources of income. Use that money to pay down your debts. Check your credit cards to make sure that you’re the lowest interest rates possible. That will make it easier to pay them off. Compare credit cards to find a lower rate card.

How to prepare for a layoff

8. Build a savings cushion.

Having a few dollars stashed away is important when you’re facing a layoff. Start a savings program today.

9. Evaluate how hard it will be to find a new job if you’re the victim of a layoff.

Are there employers looking for your skills? Or will you find it necessary to change your career path? Do a little research on job sites such as Monster.com and CareerBuilder.com.

10. Prepare a resume.

The best time to prepare a resume is before you’re a layoff victim. Here are some tips for writing a job-winning resume.

11. Seek a new job now before you you get caught in a layoff.

Use your network to find out about job opportunities. It’s always easier to find a job when you already have one.

12. Medical Insurance during a layoff.

You’ll need to make choices as to what type of medical insurance you need. No one answer is best for all situations.

13. Remember that there is life after a layoff.

Many people even turn a negative into a positive. Take a look at this woman’s story on surviving 5 years of job losses.

A layoff can happen to just about anyone. But preparing for a layoff now can make things much easier later if it does happen to you and your family.

Reviewed June 2020

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Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He’s the author of How to Conquer Debt No Matter How Much You Have and he’s been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com. Gary shares his philosophy of money here. Gary is available for audio, video or print interviews. For more info see his media page.

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How to prepare for a layoff

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How to prepare for a layoff

One of the most common questions I have gotten from friends lately is “How do I prepare for a layoff?” When I ask for the reason behind the question, they tell me of a friend or a relative that recently got laid off — or worse, the company has laid off people and warned them that there may be more layoffs. If you find yourself in this position, I am sorry. A layoff or even the possibility of a layoff is scary. The good news is that there is a lot you can do in advance to prepare, such as:

1. Get your savings account fat. I know you may have been aggressively attacking debt or saving for a cruise, but if you are facing the possibility of not having a paycheck, keeping a roof over your head and food on the table becomes your #1 goal. You may need to temporarily pay the minimums on debt, cancel upcoming vacations and focus all extra money on fattening your savings account.

The average length of time to find employment is just over 6 weeks. This can be shorter or much longer depending on your career, industry, and location. Start saving enough to cover at least three months of expenses, six being a great stretch goal.

2. Get your spending plan skinny. Trimming down your spending is the easiest way to create extra money that can go towards savings. Start trimming the fat off unnecessary expenses such as gym memberships, cable packages, eating out and entertainment. Create a “basic needs” budget to determine how much you need monthly to survive. That should include the costs of food, shelter, transportation, your creditors and possibly childcare while interviewing for a job.

3. Prep your creditors. I have learned from experience that the earlier you contact your creditors, the more likely they are to work with you if you later find yourself struggling to pay your bills. Even if you are paying your creditors on time, contact them to let them know about the potential layoff and ask about your options if you no longer have a paycheck. This would be a great time to ask for a reduced interest rate!

Get the name of the department, oftentimes called the hardship department, you would need to call for help. Also, ask for their procedure. Do you have to write a hardship letter, produce a budget, etc. to get help?

4. Understand your unemployment benefits. Read up on the qualifications for unemployment. Every state has its own requirements, length of time you will receive benefits and benefit amounts. You can even estimate your benefits. Knowing your potential benefits can help you gauge how many months you can make it between your savings and unemployment benefits.

5. Suck every benefit out of your job before you leave. Missed your annual physical or dental checkup? Need glasses or contacts? While you are employed with a paycheck and an employer-subsidized healthcare plan, get every medical need taken care of.

If possible, find out how your health insurance will be covered during a layoff. Some employers will subsidize your healthcare for a certain period of time. Others will stop subsidizing on your last day of employment.

You may be offered COBRA, a continuation of your healthcare coverage. Websites like healthcare.gov can help you understand both COBRA and the healthcare market place. Compare both options. You can use your HSA to pay for healthcare premiums when you are claiming unemployment.

6. Ask what happens to your other benefits when you leave. If you have life or long-term care insurance, find out if you can take those benefits with you. Just be aware that the premiums may be higher as an individual policy.

If you have a 401(k) plan loan, ask about how the loan is treated once you are laid off. Some employers will give you a grace period to pay the balance. After that period of time, the remaining balance is considered a withdrawal and is fully taxable. If you are under the age of 59 ½, you may have an additional 10% penalty.

7. Clean house. Being laid off can be emotionally traumatizing. While you are in your right mind, get copies of key documents such as performance records or work samples. Get contact information for payroll (you may have to request your 2017 W2 next year or update your address if you move), your HR department (former employment verification), benefits contacts, and potential references. If your layoff is imminent, start removing your personal items from your workplace.

I’ve mentioned it before, but getting laid off can be a traumatic event. The more prepared you are for the layoff, the easier it will be to find a job and the less impactful the layoff will be on your finances. A little bit of preparation can go a long way.

I’m a Resident Financial Planner at Financial Finesse, primarily responsible for providing financial education and guidance to employees of our corporate clients. I…

I’m a Resident Financial Planner at Financial Finesse, primarily responsible for providing financial education and guidance to employees of our corporate clients. I served in the U.S Army where my favorite assignment was teaching ROTC cadets how to survive a grenade assault course. My desire to help people navigate through challenging situations, particularly financial ones, led me to become a financial planner. I have over 11 years experience in financial planning, portfolio management, 401k plan consulting, and relationship management. I earned my CERTIFIED FINANCIAL PLANNER™ designation in 2010. I graduated with honors from Pfeiffer University and completed an eighteen month post-BA program in Professional Financial Planning from Oglethorpe University. I later became a CERTIFIED FINANCIAL PLANNER™ practitioner. My articles have been published in local newspapers. My commitment to educating clients has lead me to conduct several seminars for churches, professional organizations, Chamber of Commerce, women’s groups, senior centers, business associations, nonprofits and Fortune 500 companies.

How to prepare for a layoff

As I write this, the official unemployment rate is above 7 percent, and I expect it to keep climbing in 2009. If that gives you a shiver of job insecurity, good! Never has “Hope for the best, prepare for the worst” been sounder advice for your financial security. Keeping your job is probably a function of many factors beyond your control; how well you manage if you are laid off depends on how well you have planned for one of life’s most unsettling what-ifs.

Bolster your savings fund. Make it a priority to have at least eight months of living costs set aside in a federally insured bank or credit union account. Never invest emergency savings in the stock market. And don’t rely on a HELOC. When you go to tap the credit line, the bank may say no.

Get rid of debt now. If you still have income coming in, or a severance payout, and you have an eight-month emergency fund, make it a priority to pay off credit card debt ASAP. If you have an outstanding 401(k) loan, pay it off now. If you are under 55 years old and get laid off, the loan usually must be repaid within a month or two, or you will be stuck paying income tax on the loan amount as well as a 10 percent penalty.

Cut back your spending now. Don’t wait until you are laid off to save. Repeat after me: Needs, yes. Wants, no. Got it? Use the money to get out of credit card debt and boost your savings.

Maximize unemployment benefits. If you received a good severance package, don’t use it as an excuse to take a long vacation. Give yourself a week or two to decompress and then get serious about job hunting. You want to find a job before your severance runs out, and that could take months. Also, make sure you apply for unemployment benefits; you can find out how to file in your state at CareerOneStop.org . And take advantage of online filing if it’s available in your state. Given the rising jobless ranks, the offices and telephone lines for unemployment offices are jammed.

Suze Orman’s most recent book is her 2009 Action Plan: Keeping Your Money Safe & Sound (Spiegel & Grau).

How to go about surviving a layoff. Job loss is one of the most stressful life events. You need to have a good action plan in place to recover and get going in the job market.

Practical strategies will help you handle the lay off and compete for a new job.

How to prepare for a layoff

Dealing properly with your feelings and concerns will enable you to mobilize yourself and put together the right resources for starting your job search and preparing to re-enter the job market.

Take these ten steps to handle the emotional challenges of your layoff in the most effective way possible

10 Steps to Surviving a Layoff

Use these tested strategies for handling a layoff.

1. Don’t panic

Panic following a lay off is dangerous. Do not lose sight of these two facts – you are a skilled person and you will work again.

Adapt to what has happened and turn your energies to finding a solution. The way in which you look at the job loss will make all the difference in surviving a layoff. Avoid getting into a spiral of negative thought.

2. Acknowledge your feelings

It is absolutely normal to experience fear, anxiety and depression after losing your job. Don’t pretend that you are fine, acknowledge what you are going through otherwise you will not be able to deal with it.

3. Write it all down

Put down on paper how you feel.

  • What would you like to have said to the company but didn’t?
  • What upset you about the way you were laid off?
  • What thoughts keep going through your head?
  • What would you like to tell your family but feel unable to?

Empty all your negative emotions into your writing and get it out of your system. Do it as many times as necessary. You can even write a letter to the company and then burn it. This can have a very cathartic effect.

4. Make a list of all the positive things about yourself

This is a good way to build your self-esteem and feel more positive. Ask for letters of recommendation from colleagues and managers. These serve two purposes in surviving a layoff – to boost your confidence and to help you in your job search.

5. List any positive outcomes of this experience

  • What good has come from this layoff?
  • What have you learned?

Finding value in the experience moves you from been a victim to a survivor. Practice telling yourself and others “It was very hard but I’m glad it happened because . “

6. Engage in stress reducing activities

Take up yoga, jogging, walking or whatever is the most relaxing.

Key to surviving a layoff is to get involved in activities that help you reduce your anxiety and prepare for renewal.

7. Assess your financial situation

Take constructive steps to reducing financial anxiety by knowing your layoff rights.

Ask yourself what is the salary you really need to earn? Consider your savings, your expenses, your assets. Are you in a position to sell assets that no longer benefit you? Are your monthly expenses all essential?

After reassessing your financial situation you may find that your salary requirements have changed, giving you more flexibility in job and career choices.

8. Take time to reflect

The layoff gives you time to examine your job and career history, your possible career path and your personal career goals. You now have the time and motivation to consider all this and work out what your next step will be.

You are off the treadmill for a while and able to really find out where you are and where you could be and want to be in your professional life.

9. List your current skills and knowledge

Look back on your work experience and select the most valuable and marketable skills you have to offer.

Are these the skills you want to use in your next job? A free online career aptitude test or a career counselor can help you decide.

10. Upgrade your skills

Surviving a layoff may include taking advantage of the time provided by the lay off to learn new and valuable skills. Lifelong learning is critical in today’s job market, you should constantly be updating and upgrading your knowledge and skills.

  • Listen to business and motivational learning podcasts
  • Research free courses online
  • What interests do you have that could be transformed into workplace skills

Even consider changing the place where you are offering these skills. You can change your location to be where the demand for your skills is. Many people change their whole lives by moving from an area of low employment to an area of high employment.

Prepare for your job search

Once you have taken these steps it is time to prepare your resume and start your job search. Find out how at surviving a layoff

Do you know your layoff rights?

Make sure you know your layoff rights and get everything that is due to you.

This is an extremely tough time. Use the layoff tips to help you get through this period.

I’m worried about a layoff next year. If we have a recession, I am likely to be the first one out the door. What can I do to be prepared?

Preparing for a Layoff

Dear Preparing for a Layoff,

There is a great deal in your question that I can relate to. Having been through a corporate layoff in my prior career in the oil and gas industry, I am aware of the fear and stress that go along with facing an unknown future. However, contrary to you, I was not prepared.

Downsizing, reorganizations, and mergers are part of life. The Bureau of Labor Statistics for August, 2019 indicates that the average length of unemployment is 22.1 weeks ( just under 6 months) and 20.6% of the unemployed were out of work for 27 weeks or more. This fact alone should give you a strong indication of how to get prepared if a layoff and/or recession does occur in 2020.

God can be fully trusted, despite a possible layoff. He will be there for you even if things seem out of control. Keep an eternal perspective, prepare and walk in faith.

How to prepare for a layoffJust in Case

Prepare now to minimize stress.

  • Do what you can to prove your value to your manager. Document contributions.
  • Don’t participate in office gossip or rumors.
  • Keep a positive attitude. Work hard and serve others.
  • Update your resume.
  • Make sure recruiters have your correct contact information.
  • Begin a passive job search.
  • Do not use company computers, phones, networks, or search Google in seeking a job. Never search from your current place of employment.
  • Expand your network.
  • Improve yourself .
  • Build your interview skills .
  • Postpone large purchases, vacations, and anything that is not necessary
  • Go to a “needs” based budget – food, shelter, transportation, utilities, creditors, childcare.
  • Get covered medical needs taken care of now: check-ups, glasses, contacts etc.
  • Understand HSA and FSAs.
  • Build your emergency fund.
  • Prepare to pack important possessions. Copy work samples, performance reviews, and key documents. Transfer your contacts to a personal computer.
  • If needed, refinance loans while employed because banks will hesitate if you are unemployed.
  • Negotiate your bills and expenses. Example: bundle or find discounts for insurance. Consider temporarily dropping unnecessary expenses — things like cable.

If a Layoff Occurs

Don’t take it personally, unless you brought it upon yourself. If you did, learn from your mistakes! Romans 8:28 says, And we know that for those who love God all things work together for good, for those who are called according to his purpose.” He may be moving you into something far better than you ever imagined.

  • Request and read all contracts and documents you signed when you were hired.
  • Make sure you get paid for any accrued benefits, unused vacation days, or money owed.
  • Know your unemployment benefits. Will healthcare be subsidized? How long? COBRA ? HSA while claiming unemployment?
  • Verify what happens to other benefits like life or long-term care insurance and 401 (k).
  • Get copies of key documents, performance records, and work samples.
  • Get contact information: payroll, HR, benefits contacts, and potential references.
  • Negotiate a severance package.
  • Don’t burn bridges. Aim to maintain your work relationships.
  • Reach out to contacts.
  • Contact creditors. Ask the hardship department for a reduced interest rate.
  • Temporarily stop contributing to retirement and savings and build your emergency fund.
  • Make and live on a “needs only” budget.
  • Don’t panic, be humble, stay involved in your church body.
  • Pray, look for God’s provision, be patient and give thanks.

Temporarily, most people can reduce their expenditures substantially without a major reduction in lifestyle. It just requires some planning: being patient, avoiding quick financial decisions, and never spending money you don’t have even when you have available credit. It means tithing faithfully, avoiding get-rich schemes, and sticking to a budget. Those who have surrendered their finances to God also experience His faithfulness.

Pray for peace and contentment during this time. Go on a spending fast and cut all unnecessary expenses. Sell what you don’t need. Ignore the media and renew your mind with Biblical truth. Enjoy creation, spend time with friends & family. Seek simplicity and be thankful.

Count it all joy, my brothers, when you meet trials of various kinds, for you know that the testing of your faith produces steadfastness. And let steadfastness have its full effect, that you may be perfect and complete, lacking in nothing. (James 1: 2-4 ESV)

Don’t Worry

Solomon reminds us in Ecclesiastes 8:7 that no man knows the future. As much as we may think we know what will happen next year, we truly do not know will happen in the next moment. Worry involves looking to the future and projecting unpleasant events that may or may not occur. The truth is, you and I do not know if there will be a recession next year or if you will be laid off. We do know that we are to live prepared for the future but keep our thoughts on today because this is all we have.

As I look back on the layoff that I experienced, God used it for my good, especially the lessons I learned from the pain of being unprepared. You are wise to be looking ahead and ready should it happen, now you can rest and enjoy each day that you have regardless of what tomorrow will bring.

Read more about preparing for economic hardship in The S.A.L.T. Plan , a practical guide I wrote about carefully planning for hard times, and how to increase your faithfulness with your God-given resources.

Originally posted on the Christian Post, December 27, 2019.