How To Plan For A Layoff

The thought of being laid off is a frightening one, and unfortunately, the COVID pandemic has caused a lot of people to grapple with job insecurity for the first time.

Unfortunately, Layoffs are part of life. The unpredictable nature of them can cause a lot of stress because, in most cases, you aren’t being terminated due to poor work performance or even factors within your control. Many layoffs happen because of bigger issues such as economic crises and company deficits.

Sometimes you have a clue that a round of layoffs is coming, but other times, the termination letter comes completely out of the left field. While you can’t always plan for a layoff, you can still create a preparedness plan just in case, so you aren’t caught completely unprepared.

There is a difference between being furloughed and being laid off. When you’re furloughed, there’s an expectation that you’ll be able to return to work at your current company. You’ll keep your worker’s benefits, including life insurance and healthcare, and you’ll still have employment rights. However, you won’t be paid during your time off work.

Here are some tips to help you plan for a potential layoff:

1. Follow a budget. Start by creating a basic needs budget to determine the minimum you need per month to survive. That means rent, food, transportation, and the minimum payments you can make on your debt. If you have kids, this budget may need to include childcare while you’re interviewing for a new job.

   Once you have your list of the basics, you need to trim down your extraneous expenses that didn’t make the cut. That might mean canceling your cable, unnecessary subscriptions, and gym membership, eating in instead of going out every night and sacrificing your morning Starbucks run.

   It also means you’ll need to be more sparing with your usual grocery store trips. Stock up on the basic staples you need but leave the extra indulgences on the shelf. You also might want to start looking at off-brand products. A lot of the large food retail companies make their own products that are comparable but cheaper than the big name brands.

2. Keep an emergency fund. It’s tempting to make aggressive dents in your debt or tuck money away for your next vacation, but if you’re faced with the possibility of losing your trusty paycheck, food and shelter need to become your primary goals.

   You need to be prepared to temporarily make the minimum payments on your debt and cancel your next cruise. Fattening up your savings account instead needs to be a priority.

   If you’re currently employed but want to invest in an emergency fund, you might consider setting up an automatic payment into a separate savings account with each paycheck. As long as you don’t touch that bank account, you might be surprised by how quickly the money in your emergency fund accumulates.

   Many people tell themselves they can remember to set money aside on their own, but it’s much easier to do it automatically, so you don’t forget and aren’t tempted to skip payments.

3. Advance your skills and licensing. One of the best ways to be prepared is to upskill yourself and become a more valuable employee, either to avoid a layoff at your current job or to turn yourself into a force to be reckoned with when interviewing for a new one.

   This doesn’t necessarily have to require going back to school and getting a degree. Also, it can if that’s something you’re interested in.

   You can also watch online tutorials, take certification courses online, read books on subjects and theories that are relevant to your career goals, listen to podcasts and audiobooks, and become self-taught in new skills.

4. Keep your resume up to date. When you have a stable job, it’s easy to file your resume away and completely forget that it exists, which means when the time comes to dig it out of storage and make updates, you have a lot of work ahead of you.

   Instead, try to keep your resume up to date, so it’s ready to submit at a moment’s notice with minimal updating required.

   You never know what the future holds, whether that includes losing your job without warning or encountering a new, lucrative opportunity while you’re still employed and suddenly find yourself writing your two weeks notice letter. Either way, it can’t hurt to have your resume ready to go.

5. Build your network. In addition to keeping your resume current, updating your LinkedIn profile, and watching out for new opportunities, you should also maintain your existing network connections as well as seek out new ones.

   Reach out to contacts regularly to stay relevant and front-of-mind. Attend events, meet new people, invite contacts out for coffee or lunch to catch up and talk about industry trends.

   There is merit to the saying, “It’s not what you know, but whom you know.” Having a robust and active network is a great way to keep your ears open for new opportunities and possibly even get a foot in the door if one of your contacts is able to introduce you to someone with good connections or even a job opening.

6. Consider becoming a freelancer. The economy as a whole is undergoing a massive shift into remote and freelance work during the turmoil of the pandemic. If you’ve ever considered freelancing, now might be a good time to take the plunge.

   Some freelancing opportunities may serve as a temporary gig to get you through your period of unemployment until you can find another job. Or you might find your calling and steer into freelancing as a full-time career. Either way, it’s a good option to help you make ends meet.

7. Look for a job while you’re still employed. If all the signs are pointing to another way of layoffs and you know your job is at risk, now might be the best time to start sending out job applications just in case.

   If you do end up being laid off, you’ll already have a jumpstart on the process. And if you aren’t laid off, you still might end up finding a new job that’s more stable or has better opportunities and benefits.

   Keep in mind that recruiters tend to have a natural bias against the unemployed, even if the unemployment was the result of exigent circumstances causing widespread layoffs. There’s a good chance that your application will be better received if you’re still employed.

8. Keep a positive attitude. Losing your job or even simply the looming threat of being unemployed can be a traumatic experience. Fear of the unknown future and your overall financial stability is overwhelming to many people.

   Remember not to panic. Take deep breaths. Focus on the tasks at hand instead of the big picture. If you take things one step at a time, you’re much more likely to keep a clear head.

   A positive attitude can go a long way toward achieving positive results. If you’re having a hard time staying focused, trying making a schedule for yourself to stay on task and keep moving forward. And don’t be afraid to reach out for professional help if you need it.

9. Understand your unemployment benefits. Every state has its own unemployment benefits, so make sure you know what you’re eligible to receive. Knowing the amount of your estimated benefits and how long you’ll be able to receive them can help you plan how far you can stretch your savings.

   In addition to the state-specific benefits, make sure you take the time to review the documents from your employer as well. Will you be paid for your unused personal and vacation days? Are you subject to a non-disclosure agreement?

10. Negotiate a severance package. Understand your company’s policy on severance packages. If you have connections, you might reach out and see if you can discover what other laid-off employees received. There may be some wiggle room for negotiations if that’s something you’re comfortable doing.

    If you’re not in an entry-level position or think there’s a possibility you’re losing your job due to illegal discrimination, you might consider consulting an employment attorney prior to signing any severance documents.

11. Use all of your benefits before you leave. Rather than waiting until your employer-subsidized healthcare plan is gone, take full advantage of your benefits while you still have them. Schedule your annual physical, dental cleaning, and vision checkup before your benefits expire.

    If possible, reach out to HR to determine how your health insurance will be impacted by a layoff. Some employers may subsidize your healthcare for a period of time, while others will cease on your final day of employment.

    You might benefit by visiting websites like healthcare.gov to see your COBRA and healthcare marketplace options.

Final Thoughts

Layoffs are often an unforeseen and stressful experience, especially in the hard-hit print media, airline, food service, and other industries in the wake of the coronavirus pandemic.

But even if you’re in a relatively stable position in an industry that has prospered during quarantine, it never hurts to have a layoff preparedness plan ready just in case.

It’s better to be safe and prepared than sorry and uncertain about your immediate future, especially if you’re living paycheck to paycheck. If you have any concerns about possibly being laid off, now is the time to start planning. Taking steps now will ease the burden if the time does come.

Author

Chris Kolmar

Chris Kolmar is a co-founder of Zippia and the editor-in-chief of the Zippia career advice blog. He has hired over 50 people in his career, been hired five times, and wants to help you land your next job. His research has been featured on the New York Times, Thrillist, VOX, The Atlantic, and a host of local news. More recently, he's been quoted on USA Today, BusinessInsider, and CNBC.