With a potential recession on the horizon, many professionals are worried that layoffs will occur during the upcoming year. Layoffs are common when companies experience significant financial hardships, particularly when they’re coupled with declining customer demand. While a layoff is challenging for all impacted employees, there are steps professionals can take to mitigate any damage to their well-being. Here’s what you should do if you’re laid off.
Understand Your Rights
First and foremost, you want to ensure that any layoff notice you receive aligns with your rights. Review local laws governing laying off employees, as those rules may vary by location. Additionally, check any employment contracts – including union contracts, if applicable – to learn about layoff requirements that apply to your situation.
The goal is to find out what your rights are and to ensure your employer is acting in accordance with them. There may be rules regarding the minimum amount of notice required, severance packages, unused leave payouts, benefits extensions, and more. As a result, you want to make sure you’re receiving what you’re due before too much time passes.
Get the Layoff Terms in Writing
Typically, a layoff notice is presented in writing. However, if you aren’t offered an official document that outlines the terms of the layoff, including any severance and benefits extensions, request it in writing. By doing so, you have a formal document that outlines the conditions of the layoff. Along with giving you information about what to expect, you can make sure that it’s accurate and aligns with applicable laws or contracts.
Know What a Layoff Means
Losing your job for any reason is difficult to navigate. However, it’s critical to remember what a layoff is and how it differs from a firing.
When you’re laid off, it’s not because your performance was poor. You didn’t do anything wrong. Instead, the situation is merely a reflection of a company experiencing a financial hardship that it’s struggling to manage.
While it also creates a financial hardship for you, don’t connect the experience to your capabilities, competence, likability, or worth. Typically, known of those factors played into the company’s decision, so adjust your mindset by remembering that you have valuable skills and that finding a new job is possible.
Additionally, it’s critical to realize that when you look for a new position, hiring managers typically won’t hold a layoff against you. When you’re asked why you left the job or why your exit resulted in a gap in your work history, be honest that it’s due to being laid off. Hiring managers know that even highly skilled professionals can lose their jobs during a layoff, so they won’t make negative (and inaccurate) assumptions based on that being your reason for leaving.
Request Letters of Recommendation
When you receive a layoff notice, ask your manager if they’re willing to write a letter of recommendation. With one of these letters, they can formally vouch for your capabilities, character, and value in the workplace. Then, you can present the letter when you’re applying for a new job. Plus, you can review it any time you find yourself questioning your capabilities, allowing you to refresh your memory about why you’re a fantastic candidate and employee.
Alternatively (or additionally), ask your manager and coworkers if they’d serve as professional references during your upcoming job search. Since most hiring processes involve contacting references, requesting trusted colleagues who can accurately discuss your capabilities if they’d be willing to fill this critical role is wise. If they say yes, get updated phone numbers and email addresses for them, allowing you to create a quick list of contacts for future reference requests.
File for Unemployment Benefits
After a layoff, you’re typically eligible for unemployment benefits. Make sure you file immediately after your last day on the job. Often, there’s a short waiting or processing period before you’ll start receiving the benefits, so filing sooner rather than later is always your best choice.
Additionally, filing quickly creates more opportunities for financial planning. You’ll know how much you’ll likely receive, and that makes updating your budget as soon as possible easier. In many cases, you can file online, over the phone, or in person, so choose the most efficient approach available and get the ball rolling.
Explore Your Health Insurance and Retirement Account Options
When you experience a layoff, your employer typically won’t continue contributing to your health insurance benefits unless doing so is part of a formal severance package. Since that’s the case, you’ll want to explore your available options.
Along with reviewing your COBRA coverage options, see if your state offers a health insurance exchange that could help you find an alternative. That way, you can compare costs and coverage levels to find a plan that meets your needs that doesn’t bust your budget.
You also want to consider what to do with any retirement account you had with your employer. If the value is high enough, you can potentially leave a 401(k) where it is even if you no longer work there. However, it’s wise to discuss alternatives – such as rolling your 401(k) over into an IRA – with a financial advisor. That way, you can make the financial move that’s best for you over the long term.
Refresh Your Resume and LinkedIn Profile
When you’re informed that a layoff is occurring, take some time to update your resume and LinkedIn profile. Make sure your current position is accurately captured on the document, and add bullet points in the entry that outlines every noteworthy achievement.
With your resume, don’t worry about keeping the size limited when you’re adding accomplishments. Instead, record as much as you can remember and save the document as your master resume. Then, you can tailor the content to reduce the length when you find suitable opportunities.
With that approach, your odds of forgetting an achievement go down dramatically. Plus, preparing your resume for submission could be simpler, involving little more than reordering the accomplishments and deleting those that aren’t as relevant to that specific opening.
Take a Moment to Process What’s Happened
For many people, a layoff is a very traumatic experience, resulting in a wide array of emotions. Since that’s the case, taking a moment to process what’s happened is a smart move. It allows you to work through what you’re feeling before you make any major decisions or begin searching for new opportunities. Essentially, you’re giving yourself a chance to get your mindset right prior to moving forward.
Just make sure that you don’t allow yourself to wallow. After spending a little time reflecting and sorting through your emotions, transition to a forward-thinking perspective. Additionally, spend some time engaging in self-care, ensuring you have the right attitude and enough energy to walk the road that lies ahead.
Spend Time Reflecting on Your Career Path
Taking some time to reflect on your career path after a layoff is also an intelligent move. It allows you to gauge your level of satisfaction, as well as consider whether the industry is stable or likely to recover once economic conditions improve.
Consider whether you find your field satisfying and whether you generally enjoy the responsibilities that come with it. That may help you determine if staying the course or changing careers is your best choice, allowing you to move in the right direction.
Additionally, examine your skillset and other credentials. That way, you can see if there’s anything you’re missing that you might want to acquire once you are laid off. In some cases, the layoff turns into an opportunity to boost your capabilities, so keep that in mind as you plan for what comes next.
Update Your Budget
When you’re laid off, the amount of income you’re receiving typically declines dramatically. As a result, you’ll need to examine your complete financial picture and adjust your budget.
Even if you have money in savings you can use, reducing your expenses ensures that the cushion lasts as long as possible. Cut back as much as you can to see if you can cover what’s left solely on your new income level. If not, see how much of your savings you need to dedicate to handle the gap, allowing you to estimate how long your savings will last.
Launch Your Job Search
Launching a job search as soon as possible allows you to shorten the amount of time you’ll end up relying on a reduced income. Begin by identifying what you need to find in a new role. Consider the skills you want to use, as well as any duties you’d prefer to avoid. Think about the culture you’re after and what type of compensation you’ll need to meet your needs.
After that, use several avenues to explore opportunities. Head to job boards and design searches that you can turn into job alerts. Reach out to your network to let them know you’re looking for a new job. Partner with staffing firms to access even more opportunities.
You can also consider freelancing opportunities, temporary jobs, or contract work. Each of those has unique benefits and drawbacks, but they’re worth keeping on the table if you’re concerned that your post-layoff income level is unsustainable.
It’s also wise to create a formal schedule for your job search activities. By allocating specific times to seek out new opportunities, follow up on applications, network with your connections, and take similar steps, you’re establishing a new routine. Plus, it ensures you’re dedicating enough time to make progress while still maintaining a sense of balance, preventing you from overdoing it and, ultimately, burning out.
When you find an opportunity, take a moment to target your resume before applying. Adjust the content to speak to that specific employer’s needs. Make sure you incorporate keywords from the job description into your resume to position yourself as the strongest possible match.
Prepare for Job Interviews
As you search for a new job, it’s wise to put some job interview preparation time into your schedule. Part of job search success is coming across as competent and confident when meeting with hiring managers. By regularly practicing answers to common interview questions, you’re giving yourself a chance to get comfortable with discussing your relevant achievements and sharing your expertise. As a result, when you land an interview, the upcoming experience feels less daunting, which makes a difference.
Do you have any other tips that can help someone if they’re laid off? Were you laid off recently and want to tell others how you’re navigating this challenging situation? Share your thoughts in the comments below.
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Tamila McDonald has worked as a Financial Advisor for the military for past 13 years. She has taught Personal Financial classes on every subject from credit, to life insurance, as well as all other aspects of financial management. Mrs. McDonald is an AFCPE Accredited Financial Counselor and has helped her clients to meet their short-term and long-term financial goals.
