The end of the year is usually a welcomed reminder that holiday vacations and time with family are drawing near. Unfortunately, what some workers don’t expect, and therefore fail to plan for, is a year-end layoff.
Imposing mass layoffs on employees looking forward to the new year may seem cold, but for companies struggling to meet their bottom line, it’s an unfortunate inevitability regardless of the season.
According to a Challenger, Gray & Christmas Inc. report, up to 150,000 jobs are in jeopardy in 2012 Q4 — a 46 percent increase from from Q3. The onslaught of recent job losses, from Boeing layoffs resulting in a 30 percent reduction of management-level positions, to the 18,500 jobs dropped as a result of the Hostess liquidation, is indication that employees need to take proactive measures to safeguard their emergency savings account funds before their number is called.
5 Steps to Preparing for a Layoff
Whether an employer issues a formal announcement about imminent restructuring, or if you’ve already noticed a cluster of co-workers being escorted off the premises each week, preparing for a layoff before you’re given a pink slip will help you weather future financial uncertainty.
#1. Pause Retirement Account Contributions
Surviving a layoff requires that you concentrate your funds into an easily accessible location. This means that it’s time to put your retirement savings contributions on hold for a moment in order to focus on the more urgent crisis at hand — a potential layoff.
Instead of locking funds into an account that penalizes you for withdrawing money when you most need it, reroute cash reserves to a deposit account with high liquidity. A basic high-yield savings account typically allows you to make up to six withdrawals per statement cycle without incurring a service charge, while also earning you earned interest for the funds that are kept in the account.
#2. Downgrade Service Contracts
If your current employer is experiencing changes similar to the Boeing layoffs, which include efforts to cut costs and maintain desired profit margins, you’ll need to look into how you spend your existing income. Often, the security of a steady income entices consumers to opt for the highest-tier services available, the costs of which are excessive when preparing for a layoff.
The key to dealing with being laid off and successfully keeping afloat financially is to reassess your standard of living. Is premium cable truly a necessity, or is making your auto loan payment more important in the larger picture? Make temporary service contract downgrades to free up funds for your emergency savings fund, which you’ll come to rely on between jobs.
#3. Update Your Resume and References
Keeping up-to-date on your resume and reference sheets is essential in jumping on an employment opportunity when it arises. Ensure that you list all your key contributions and responsibilities in your current role, as it’s very likely that you haven’t touched your resume since being hired.
Reconnect with existing references to remind them that they may be contacted as a reference, and touch base with new contacts who are willing to attest to your skills and talent.
#4. Revisit Your Current Employment Contract
It may have been quite some time since you last sat down with your employment terms and the company’s severance policy. Review your employment contract to reacquaint yourself with any agreements you made regarding a severance package when you were hired on, and identify what lingering benefits the company might bestow to you in the event you transition out.
Keep in mind that the door is always open to negotiate additional severance benefits like continued health insurance coverage for your first month of unemployment, or company-paid services like resume writing and networking workshops. There is no harm in asking, and seeing as you’re already facing a layoff, there’s really nothing else to lose.
#5. Get Out and Network
Networking with others in your field is integral in having an advantage over the millions of unemployed workers in the market. Search for local, free job fairs or networking opportunities to expand your connections. If there are no free industry networking events taking place in your area, gather a list of paid networking events that your company can cover on your behalf if severance negotiations go well.
Connecting with peers at these kinds of engagements, as well as potential employers, increases your exposure to hopefully decrease the amount of time you’re stuck unemployed.
Preparing for a layoff is never easy, nor does everything fall neatly into place regardless of how proactive you are in minimizing the blow. However, successfully surviving a layoff cannot be achieved without some planning ahead of time.