How to Prepare for a Layoff Before It Happens
Useful tips to help you prepare for layoffs
Recent global news has been filled with headlines on widespread layoffs.
While it may not come as a surprise when such news involves prominent tech giants like Meta or Amazon, it becomes considerably more unsettling and anxiety-provoking when we observe a pattern of mid-sized and small businesses reducing their workforce.
Inspiring you to think “Am I next and what can I do to prepare if I’m laid off from my job?” While it’s not something anyone wants to think about, it’s important to be prepared in case you find yourself facing a layoff, so you can reduce the long-term impact this traumatic experience can have on your personal and professional life.
How do layoffs work?
A layoff, also known as a redundancy or downsizing, is when an employer terminates a group of employees due to various reasons such as financial difficulties, restructuring, or changes in the industry.
This decision is usually made by upper management and can be sudden or planned in advance.
In most cases, laid-off employees are given a severance package as compensation for their job loss.
Layoffs can also be temporary, and affected employees can be called back to work when the company’s situation improves.
What is the W.A.R.N. Act?
The Worker Adjustment and Retraining Notification (W.A.R.N.) Act is a U.S. labor law that requires employers with 100 or more full-time employees to provide at least 60 days’ notice of mass layoffs or plant closings.
This allows affected employees time to prepare for their job loss, find new employment, and plan financially.
However, not all states require employers to follow this law, and some exceptions may apply, so it’s important to research your local labor laws.
Following steps like completing a career checkup, revising your resume, and assessing your current expenses can help you prepare for a potential layoff.
6 Steps to Prepare for a potential layoff
Steps to prepare for a potential layoff include completing a career checkup, revising your resume, and committing to networking.
- Complete a career checkup
- Revise your resume
- Asses your current expenses
- Start building an emergency fund
- Commit to networking
- Consider starting freelance gigs
1. Complete a career checkup to prepare for a potential layoff
What’s the current health status of your company? Is the market tumultuous, but your company’s still meeting its financial goals or are they struggling to find business to stay afloat?
Staying informed through internal communication can help you assess if it’s time to start revising your resume and networking to find your next job.
2. Revise your resume to prepare for a potential layoff
It’s important to have an updated resume ready in case of a layoff. This way, you can start applying for jobs right away and not waste any time.
Take a detailed inventory of your current responsibilities, so you can update your resume with relevant hard and soft skills, project outcomes you helped influence, and ensure that you’re presenting yourself the most accurately as a candidate to a future employer.
3. Asses your current expenses to prepare for a potential layoff
Assessing your current living expenses can help you create a bare-bones budget, so you can get an idea of where you’re currently overspending and where you can cut back in discretionary expenses to fold into an emergency budget.
Knowing how much money you’ll need for monthly expenses like rent, groceries, and bills will help you determine where to allocate your money wisely while you focus on securing a new job.
4. Start building an emergency fund to prepare for a potential layoff
Having an emergency fund can help provide a financial cushion during a layoff.
There’s often no set timeline for when you’ll be able to secure a new role, so having extra money stored away can help minimize additional financial stress.
Financial experts often recommend having enough money saved to cover three to six months of expenses, but any amount of savings will make a difference during this difficult time.
5. Commit to networking to prepare for a potential layoff
Networking is an essential skill to have, especially during a job search.
Start building genuine connections with colleagues, mentors, and industry professionals now so that you can rely on them for support and potential job opportunities if needed.
Your network is your net worth, so having connections that can vouch for you for a new role can help you shorten the time it can take to locate a new position if impending layoffs are imminent at your company.
6. Consider starting freelance gigs to prepare for a potential layoff
Having a side hustle or part-time gig can provide a backup source of income that can help you store more money in your emergency fund, but also helps diversify your income streams, so if one is terminated because of a mass layoff you at least still have some funds coming while you search for a full-time position.
It could also potentially turn into a full-time job if needed.
Consider your skills and interests and explore freelance opportunities in areas such as writing, graphic design, or virtual assistance.
Why should you prepare for a layoff?
Unexpected layoffs can happen to anyone, regardless of job performance or tenure. That’s why it’s important to look for warning signs like financial hardship at your company or an economic downturn that could affect your industry to prepare.
Depending on the market, finding a new job can take a significant period of time and effort, so having a plan in place will help you reduce financial hardship while you look to secure a new job if a layoff ensues.
In addition, having a plan can help you reduce emotional and mental stress over the impact of layoff.
Preparing for potential layoffs
Layoffs are never easy, but being prepared can make the transition less stressful and allow you to focus on finding your next opportunity.
Start taking steps now to prepare for a potential layoff, such as completing a career checkup, revising your resume, and building an emergency fund.
Investing time in networking and exploring freelance opportunities can also provide additional support during this difficult time. Remember, it’s always better to be prepared than caught off guard.
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