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12.4 How to Secure Your Job during Difficult Economic Times

Learning Objectives

  1. Learn the signs of a potential layoff.
  2. Get strategies for how to handle a layoff and move on to a new job.

The recent high unemployment numbers underscore that an important part of career success is staying employed even when the economy is difficult. The first three sections we covered in this chapter all contribute to securing your job:

  • Doing well in your daily work increases your value for that job.
  • Maintaining open communication and a good relationship with your boss ensures that you stay positively in mind if layoff decisions need to be made.
  • Having a broad professional network means other people may support your case.
  • Being mindful of career advancement helps because organizations like to keep strong performers.

However, sometimes even good workers get laid off. Companies buy or merge with other companies, and this often means there will be overlap—for example, two human resources (HR) departments, two accounting departments, and so forth. The new company may not need or have a place for everybody. Organizations may close their doors altogether. Enron, Bear Stearns, Lehman Brothers, and several nonprofits with money invested with Bernie Madoff closed quickly, without any warning in some cases. Therefore, knowing that layoffs can happen through no fault of your own, you want to be able to see the warning signs (so you have more time to react) and manage a layoff so you get the most support and momentum to move on to a new job

Watch for Warning Signs before a Layoff

It’s hard to predict the exact timing of a layoff, but certain events indicate that you should start paying closer attention to the health of your organization and the security of your job:

  • Changes in the economy
  • Changes in industry
  • Changes in an organization’s financial standing
  • Changes in management
  • Changes in behavior of managers, coworkers, and subordinates
  • Changes in job responsibilities
  • Changes in performance feedback

If the overall economy is stagnant or depressed, repercussions are felt throughout many industries. Public schools are impacted by state budget cuts. Hospitals face shrinking federal funds. Nonprofit endowmentsPool of money set aside by a nonprofit to be invested and drawn upon for its operating expenses. decrease and, subsequently, so do their operating budgets. Consumers spend less, so retail stores have lower sales and lower revenues. Businesses have less money to spend on advertising, technology, consulting, and other business services. If the economy takes a hit, your employer likely takes a hit. If the economy suffers a deep blow, it might be enough to threaten your employer’s ability to maintain its workforce.

Sometimes specific industries are hit especially hard. Housing has undergone a recent contraction, so mortgage services, builders, housing-related equipment and supplies, and other real estate-related companies are struggling. If you hear that your employer’s competitors aren’t doing well or that your broader industry isn’t doing well, follow the news more closely. If an industry your employer serves isn’t doing well, that impacts you just as directly. For example, when car companies were having financial trouble, the advertising agencies that relied heavily on automotive company business also were hard hit. The Occupational Outlook Handbook produced by the Bureau of Labor Statistics tracks hundreds of different jobs and gives estimates on future job prospects for that role.

You may be tempted to disregard your organization’s internal memos, newsletters, or even annual report, but it is a good idea to stay current with your organization’s health. Is it profitable? Does it have a diversifiedHigh amount of diversity. A diversified customer base could mean you have several customers, so business is not concentrated in any one customer. It could also mean the customers are in different industries or sectors, so business is not subject to the financial health of any one industry or sector. customer base—that is, a lot of different customers, so you are not relying on any one group? Is your employer growing? Is the growth related to your job, or is it in a different geography or different functional area?

If your organization’s management changes, that is a sign to follow your work environment and prospects more closely. It is customary for a new executive team to want to bring in their own people. If you are new to your career and many levels below the executive team, this may not affect you now, but it’s something to remember as you advance upward in your career. In addition, if your immediate boss changes, the new boss may want to bring in his or her own team, and that does affect you, regardless of how junior you are.

Earlier in this chapter, we talked about keeping open communication, developing relationships, and getting feedback. You want to do this on a regular basis because changes in the behavior of your boss or colleagues (or team when you start managing others), as well as changes in your responsibilities or your performance feedback should be watched closely. You want to have time to turn things around if you discover people are not happy with your work. If you can’t ameliorate the situation where you are, you want to have time to look for your next opportunity and leave on your own terms.

Improve Your Situation If You Do Get Laid Off

A layoff doesn’t have to mean you did a bad job. If you are let go for performance-based reasons, by all means learn from that. If you are fired because you didn’t get along with your boss or coworkers, try to establish better relationships at your next job because professional relationships are important. If you were laid off due to a bad economy, restructuring, or other external reason, let the job go and focus on moving on to your next job.

To make the most out of a layoff situation, you can take action steps at different stages:

  • During the termination process
  • Before your final day with the organization
  • After you leave the organization

Manage the Termination Process

Layoff scenarios will vary based on how much lead time the organization has to prepare and how many resources it has to support the layoff. A small business with few employees will handle layoffs differently than a large, global company with thousands of affected employees. The following is a roadmap for managing the termination process in a large organization that has resources to provide support for laid-off employees.

Once a layoff is announced, you will meet with HR to discuss the terms of your severanceMoney you are paid after a layoff. This might be in a lump sum, or the organization might keep you on payroll and continue your salary even when you are not working there. and your end date. Prepare for this meeting by reviewing your organization’s manual and any information about the severance policy. Some questions to consider include the following:

  • How is severance pay calculated (typically by years of service, but additional compensation is sometimes given after long tenure, if little warning is given, or if many employees are affected)?
  • What happens to bonuses or other compensation that haven’t been paid yet?
  • What happens to retirement benefits that still need to vestTo be eligible for something. Your retirement benefits have vested when you are eligible to draw on them.?
  • What health coverage and other benefits are available?

Ideally, you have a friend in HR who can explain the policies to you before the termination meeting so you know what to expect and what you want to negotiate if you need more than the policy dictates. Severance packages are negotiable.

During the termination meeting, listen closely and take notes. Fully understand the severance package being offered. Ask questions if anything is unclear. Agree to get terms of the severance package in writing. Schedule a follow-up meeting for after you have a chance to review these items. Do not negotiate yet because you want to take time to prepare.

Remember that the organization probably regrets having to lay you off and wants to help you. Once you have received your offer, check what is customary for organizations similar in size and in your industry. You might want to negotiate for some of the following items:

  • More severance pay
  • Longer health-care coverage
  • Payout for bonuses accrued up to your end date
  • Immediate vesting of your retirement benefits
  • OutplacementCareer coaching and support for workers who have been laid off to help them secure their next job. or career coaching to help get your next job
  • Payouts for unused vacation, sick, or personal days
  • An end date further out (Your end date may determine things like bonus pay, retirement vesting, and even accrued vacation days, so the further out your end date, the more you might accrue.)

Secure Your Relationships before You Leave the Organization

Collect contact information for the people with whom you’d like to keep in touch. Don’t forget to share your personal contact information because most of your colleagues are used to reaching you at your work e-mail. Arrange with the IT department to have an automatic reply to your work e-mail that enables people who are trying to reach you specifically to have access to your personal information. If you do not want to share your personal information with everyone who may contact you at work, create a temporary account on Gmail or Yahoo! specifically for this forwarding purpose. Have the temporary Gmail or Yahoo! account forward to your primary personal e-mail and then you can decide if you want to share your information at that time.

Thank your boss, management, colleagues, and direct reports. Even if you are not personal friends with all these people, you may need them for references or job leads. For people whom you know you want for references, ask them while you are still on staff so you can do so personally. Get their personal contact information, in case they get laid off, too, or otherwise leave the company. Collaborate with your boss on what details of your layoff will be distributed both inside and outside the organization. You want to make sure you have a consistent and positive story.

Check with HR to see if there are consulting opportunities within the organization or openings at subsidiariesA subset of the organization. An organization might split into subsidiaries so that each subset can focus on a different product or service, or otherwise remain separate from other subsidiaries but still be connected to the whole organization. or partners of the organization. Find out if a formal process is necessary to submit your résumé or arrange interviews.

Some organizations require that you leave your office the same day you are laid off. You may not have time to take all the preceding steps. If you know this is a possibility where you work (check what is customary for your industry and also how your organization handled layoffs in the past), make sure you have personal contact information well before any danger signs are visible. Make sure you can quickly pack your office and take what you need. Do not keep your personal contacts only on your office computer or office phone because you might not have enough time to pull these contacts off before you lose company access to this information.

Get Ready to Start Your Search Right after You Leave the Organization

It’s fine to take time off to recharge, but don’t mistake your severance period for a paid vacation. Use that time to start your job search while you still have a cash cushion. Don’t wait until you are running out of money and then cram in an anxious and desperate job search.

Run your numbers on how much cash cushion you have (given severance, savings, and so forth) to give you a timetable for your job search. A proactive job search typically takes three to six months. If you need money coming in sooner, you might want to build in time for temporary or consulting work in addition to your job search.

Your job search is now your full-time job. Schedule time for specific job search activities. Prioritize your job search so you are not tempted to spend this new “free time” reorganizing your house or doing non-career-related projects.

Key Takeaways

  • Changes in the broad economy, your industry, your organization’s financials or management, or the feedback you are getting may signal a potential layoff.
  • If you do get laid off, manage your termination process to get the maximum support to which you are entitled.
  • Before you leave an organization, collect contact information and say thank you. Relationships with your former employer are still important.
  • Don’t wait too long to start your job search, so you won’t feel rushed or pressured to land a job right away.

Exercises

  1. Start the habit of following the broad economy and your target industry. Add The Wall Street Journal, Financial Times, Fortune, BusinessWeek, or other general business publications to your reading list.
  2. Compose a checklist for yourself with what you need in a layoff situation so that when you start your new job, you have it as a reference tool. Remind yourself to keep personal contact information somewhere other than just on your professional equipment. Remind yourself to review your organization policies and build relationships with HR before you need them.