I got a request recently for a blog post on this particular topic. I’ll be honest – I don’t think I have all the answers on this one; however, I’m going to give it the old college try and see if we can discover some steps you can take to be prepared (kinda-sorta-maybe) for the proverbial “pink slip”.
This isn’t going to be one of my normal posts – being prepared to lose your job isn’t your proto-typical financial problem. There are some financial steps you should take – more on that later – but I want to address the more philosophical aspect of this issue. To many, the prospect of being laid off is more than just a passing concern; it’s more like a personal fear. It’s a recession when your neighbor loses his or her job; it’s a depression when you lose your job.
This isn’t really a math problem – you need to mentally prepare yourself for the real possibility, at some point in your career, that some business-case analysis will result in your position being eliminated (accountants call them efficiencies). I have first hand knowledge of this particular phenomenon (I was laid off from Alltel in 2001) and will readily admit it can be quite disconcerting – for some this can even lead to bouts of depression. To many, their job is, in many ways, an extension of themselves. Being laid off can be a form of rejection that some struggle to quickly recover from.
I personally don’t think it’s particularly healthy to throw your very own pity party – I say mourn (briefly) and move-on. I want to solve this problem with faith, friends, and preparation.
Faith – I think most of you know that my faith is very important to me and my self-worth is not encompassed in my occupation. My job is not who I am – it’s what I do to help support my family. I’m a Christian and believe my value comes directly from the creator of the universe – he sent his son to die for my sins (John 3:16) – to give me a hope and a future (Jeremiah 29:11). I could go on but don’t imagine you tuned in for a sermon. For this reason I remain cautiously optimistic. If I lose my job, I will find another – this too shall pass. Wisdom, guided by experience, has taught me this is so.
Friends – I recommend you confide in someone about your thoughts – warts and all; someone who will unconditionally love you and listen to your concerns, fears, dreams, etc. I believe God created us to be social creatures and don’t believe it’s healthy to go through life alone.
Preparation – I believe there are many financial steps that you can – and should – take in preparation, should you find yourself unemployed – made available to the industry so to speak. I’m going to list 5 steps that might help:
1) Emergency fund – most financial experts recommend you set aside 3 – 6 months living expenses. This is really sound advice as this cushion is designed to handle the proverbial “rainy day” that will certainly occur should you find yourself without a steady paycheck. If your company announces a merger (politically correct way of describing an acquisition) then I recommend making sure you have at least 6 months set aside.
2) reduce your expenses. I think this is important for a couple reasons. First, you might need to reduce your expenses to fully fund your emergency fund. Second, your next job might involve a lower salary and “right-sizing” your budget is a lot easier when you do it by choice, rather than by necessity. See below a previous post that will hopefully help you brainstorm some ways to cut back on your lifestyle.
3) update your LinkedIn profile and your resume. Regardless of a pending job loss – I strongly recommend you maintain a good network of business contacts (i.e., others in your industry, leaders, recruiters, etc). This is a good idea because you can learn from others (stay sharp!) and this network will come in very handy should you need a reference or an idea of a good company to work for.
4) talk to a recruiter – in many industries this a very valuable way to learn about job opportunities. For example, Robert Half is a well-known financial job placement firm. They can also help you assess what you can/should expect in a salary – based on your skills, location, industry, etc.
5) read the book “strengths finder 2.0”; really more of an online assessment tool that helps identify your personal strengths to help narrow your job search to occupations you are best suited. This might be a great opportunity to explore a different field or occupation – don’t immediately take the next job that comes along. See below a link to a previous post.
I think these 5 steps are a good place to get started but I hope you will also consider (ask a good friend as well) how valuable an employee you are currently and what you can do to become even more valuable. It’s difficult to find talented employees so take the necessary steps to make yourself the best version of you possible. The previous post also includes other tips to enhance your career path. I’m sure there are many other tools and techniques to deal with, and prepare for, being outsourced but I hope you found this post helpful.
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Drop me an email (email@example.com) or comment below about your thoughts about being prepared, should the corporate cronies give you your walking papers.
5 thoughts on “How to prepare if you think you might lose your job?”
Emergency Fund! Emergency Fund! Emergency Fund! LOL -Usually the biggest stress about losing a job is the financial unknown. My company just announced a merger, and while it looks like everyone’s job is safe for now, the emergency fund is such a huge relief. Great Post!
Thanks for the comment- I’m sure you’re right- an emergency fund is the not so secret sauce to getting through a tough transition- sometimes a layoff is a blessing in disguise . . .
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