Now that the recession, bear market, and downturn have been flying off the lips of both the media and the general public, it's no surprise that you might be concerned about your job. Or your business if you are one of those lucky enough to call themselves "self-employed".
Already I've heard of companies laying off workers, such as Tesla and Redfin, and even some companies that are rescinding job offers! I don't know about you, but if I just quit my job because I accepted an offer at another company, and then they say thanks but no thanks, I'd be fuming.
The funny thing is that even though it's frowned upon to do and gets bad publicity, it's not that unusual. As the economy ebbs and flows, companies have to adjust to what the market commands of them.
If they anticipate ramped-up demand for their products or services, they will hire people. If they see revenue declining or cash reserves running low, they might freeze hiring, or move forward with layoffs.
Remember though, that economic cycles inevitably impact different industries in various ways.
For example, currently, there are still a LOT of openings in the retail and service industry. Grocery stores need people to stock their shelves, hospitals need equipment techinicians, dealerships need mechanics, and restaurants need line cooks.
On the other end, many tech companies and others who hired aggressively in the last year or so, now find themselves overstaffed, and are foreseeing a shortfall in revenue. So, since many of them are public and answer to shareholders, they have to be agile in how they anticipate fluctuating revenues.
If you're laid off, you first need to determine:
What, if any, severance package you are entitled to
How long your benefits will last, and if your company will subsidize any of them.
File for unemployment through your state's labor department.
Look at your emergency fund. Combined with any state and company level assistance, how long until your funds run out?
Audit your cash flow and cut discretionary memberships, costs, subscriptions, etc.
Think about supplementing your job search with some side income, such as freelancing, ridesharing, or part-time work.
Laid off Versus Fired: What's the Difference?
What is the meaning of being laid off? Being laid off means that the company is eliminating your position, for reasons that are not due to the employee's performance. Being fired, well, you know what changes in that definition.
Don't confuse getting laid off with a furlough though. A furlough is technically a temporary leave of absence from a company. Meaning that the intention is for you to return, even if it is with a reduced schedule. Most employees don't receive pay when on furlough, but may still receive benefits and wouldn't need to be formally rehired at the company.
At the beginning of the pandemic, many employees in the travel and leisure industry were furloughed initially. However, as Covid dragged on and became more serious, those employees were laid off.
Getting fired is when you get called into the office (or in today's world, an impromptu and ominously titled Zoom meeting) and told specific reasons or actions of yours that are leading to the company terminating your employment. It could be due to the complaint of a colleague, poor job performance, breaking HR code, or as simple as being habitually late.
Of course, the voluntary option to these is quitting your job, ahead of any company action on your employment, yet that would leave you in a less desirable position as we'll discuss below.
Why Being Laid Off Can Be a Good Thing
I can already see you rolling your eyes "Oh great, another think on the bright side baloney!"
Look, I get it, getting laid off sucks. In some cases, it can be even worse than getting fired. Because in some cases, you can foresee getting fired and learn from it, so you don't make those mistakes again.
But what about when you were working really hard on some projects, hitting your sales goals, and taking on work because your company was understaffed, only to get laid off? It can leave a feeling of betrayal and resentment that can be hard to shake off.
Being laid off can be preferable to getting fired, in a few ways. First, you are eligible for unemployment insurance if you are laid off; you don't get it if you were fired.
Second, if you worked for a decent company, they should have offered you some kind of severance package. I've seen this as small as two weeks' worth of pay, to almost two years worth of pay, all upfront.
A severance package, combined with unemployment insurance, emergency savings, and an adjustment to your expenses should give you some breathing room to find your next primary source of income.
So, how can unemployment have a silver lining? Well, you finally have the stage to give that idea in the back of your head a chance.
Think of it this way. What would you do if you were suddenly granted a 1-year severance from work? Or if you are on medical leave for 6 months? What have you always wanted to do that you didn't have the time or energy for?
How to Navigate Unemployment
Ok, so here were are. The layoff has happened, you got a 2-month severance, and have about 3 months' worth of savings left in your bank account. Now what?
If you were proactive, you've been keeping in touch with recruiters on LinkedIn. Now's the time to reach out to them! Or, I've also seen people post on LinkedIn that they lost their job, what kind of work they are interested in, and what their skills are. When the posts are candid and heartfelt, I've seen the response be very, very positive.
What about those who don't work in white-collar work? Well, first of all, I see a lot of demand for manual labor jobs and those that are very crucial to the operation of our society, so I hope working-class jobs are not having to navigate layoffs right now.
However, if are an auto mechanic, construction worker, utility lineman, or a similar line of work, start with your local workforce development office. Many have connections to area employers looking for your skills.
You can also post on relevant job boards, ask your public library, or ask the local community college career center if they have any advice. In my experience, they are some of the kindest people around!
So, the best way to prepare for a layoff is to work for yourself. You can take time off whenever you want, never have to worry about paying into unemployment insurance, and when the economy derails your revenue, you can just take all the small business loans you want!
Kidding. Though, I will say being self-employed is one of the best ways to control your destiny and use the good times to bolster your savings.
As for the rest of us, keep tabs on your network, stay connected, buffer your savings while you can, and think about side hustles you are passionate about. Being laid off can afford you the time to finally write that book or build that furniture! And when a job offer finally comes your way, grab your new work bag, stride into the office, er bedroom, and startup Zoom like you've missed it so much.