How to Predict and Prepare for Layoffs
Nobody is safe from layoffs. Whether you are an executive or an entry-level employer, layoffs can – and likely will – affect you at some point in your career. Consultants and freelancers have a small buffer from their multiple sources of income, but when their industry suffers, so do they. (There is nothing better than losing four clients in one month.)
However, you can vaccinate yourself against potential job loss by learning how to anticipate layoffs, how to manage your finances when you suspect layoffs are coming, and how to use your network to keep your career going even after your employer. let go.
Know how to predict layoffs
While some layoffs seem to come out of nowhere, companies often give clear signals that layoffs are coming. Sometimes these signals are obvious – your company merged with another company (or was bought out), your company had its worst quarter ever, other departments started laying off people – and sometimes they are more subtle.
Alison Greene of Ask the Manager advises you to monitor the following metrics:
- A pinch: Are travel budgets shrinking? Office coffee is no longer free?
- Pending projects: Do you have less work than usual? Do you hear something like “we are not going to move in this direction yet?”
- Restructuring: are there rumors of new org charts? Are people being asked to take on additional work that is usually associated with a different role?
- Recruitment freeze: If companies stop hiring, they can start firing.
“There is no way to guarantee that you can see this coming because employers usually do it very close to the vest when considering layoffs,” explains Green. “In fact, many companies will continue to insist that they do not intend to carry out layoffs until the moment they do so. Very often they will not help you know what is going on, but in many cases, if you pay attention, you will see signs. “
Get your finances in order
In an ideal world, you would have a reliable emergency fund to help you during times of unemployment.
We do not all live in this ideal world. Maybe you had unexpected expenses in the past year, maybe you focused on paying off your student debt, and maybe you saved 10 percent of your income every month but haven’t reached the emergency fund level yet. (If you set aside 10 percent of your income each month, it will take 30 months to create a three-month emergency fund.)
Melissa Singletary of the Washington Post offers the following advice:
You must save your money right now. You cannot afford to pay extra on your debt. You may need this money to keep the lights on or buy food. Focus on core spending until you overcome this crisis.
Cutting your debt repayments to a minimum will seem like a terrible financial strategy right now, but you’ll be glad you have that money in your checking account when you stop receiving regular paychecks. If your employer starts buying up a pittance, you should also: Skip lunch, refrain from that big purchase on your own, and wear these socks with holes in your toes for a little longer.
One word of caution, though: keeping cash doesn’t mean “making new purchases with your credit cards.” Now is not the time to go into new debt if you can help. At best, you will have to wear these old socks for a few more months while you pay with these cards. In the worst case, you could run out of cards, miss some payments, and lower your credit score.
Start your job search right now
The best time to look for a job is when you already have a job, and right now you already have a job .
So move on to the next one.
You can play resume roulette online – and you probably will – but you should also reach out to your network and let them know that you are looking for new opportunities.
This means taking the time to figure out what opportunities you want and why will be right for you. (If you’re not talking to a close friend, I wouldn’t say, “I need a job because I think I’m going to be fired soon”). It also means updating your resume, ditching your interviewing skills, and possibly choosing to acquire a new skill or two to add to your portfolio.
“If you really see signs that layoffs are coming, it makes sense to start at least a modest job search,” Green suggests. “That doesn’t mean you have to move to another job, but if your job ends up being cut, you’ll be glad you got a head start.”