How to Prepare for a Layoff Before It Happens

The job market is rapidly evolving. Changes in the economy spur companies to adjust their workforce, and while automation and technology have made it easier for businesses to operate, sometimes they’ve prompted companies to eliminate positions. Not surprisingly, many workers say they’re concerned about losing their jobs.

For example, in a 2019 Harris Poll, almost half of employed Americans said they suffered from layoff anxiety. A third of respondents said they were concerned about a pending recession, 32% said they were concerned about a layoff due to rumors at the office, and 30% said their fears were linked to recent layoffs at their workplaces. A total of 47% of workers said they felt ill prepared for an unexpected job loss.

Also of note is that people ages 18 to 34 reported having greater anxiety about being laid off than older workers, despite having fewer financial responsibilities, such as children and mortgages. This may be due to younger workers having concerns about their lack of experience, or millennials remembering what it was like to see their parents get laid off during the Great Recession.

The bottom line is that the economy and the job market are unpredictable, and while it’s difficult to predict who’s at risk of being laid off, you can take steps to prepare.

One of the most important ways you can prepare for a possible layoff is to make sure that your skills and professional connections are up to date. Networking, maintaining contact with former colleagues, and staying on top of industry trends can make you marketable if you need to search for a job.

Networking is about more than attending conferences or seminars. For example, developing contacts (and joining groups) on LinkedIn; attending alumni association and professional association meetings; and staying in touch with friends, clients, and past colleagues are all important. Developing and nurturing these connections can help if you need to search for new employment.

No matter how secure your job may feel, you should always make an effort to expand your knowledge and skills. While some workers do this by enrolling in continuing education classes, others may volunteer to take on leadership projects or to serve as liaisons to teammates in different departments. Understanding how you can provide value to your team, as well as how your team can provide value to the company, demonstrates that you understand the big picture.

Keep a current version of your resume handy, and make sure to monitor job boards. Indeed recommends revisiting your resume at least twice a year if you’re currently employed. If you’re concerned you may forget, set a recurring calendar reminder.

You should also pay close attention to trends in your industry and explore jobs with high growth potential. Lastly, make sure that your professional online profiles (on websites such as LinkedIn) are current in case employers are looking for talent, and be sure to maintain a portfolio of work that highlights your skills.

It’s always a good idea to familiarize yourself with concepts such as how unemployment works, the health benefits available through COBRA and elsewhere, and whether you’ll qualify for severance pay if you’re laid off.

When you were hired, you were likely asked to sign a contract, and you may have been given an employee handbook. You’ll want to take some time to reread everything and familiarize yourself with what you signed. These documents often outline a company’s policies regarding severance pay. For example, most companies are required to pay laid-off workers for unused vacation time.

Lots of companies ask their employees to sign noncompete agreements, but most people don’t know that noncompetes aren’t always enforceable. For example, in Illinois, physicians, broadcasters, and government contractors are exempt, whereas in California, state law says that all noncompete agreements are unenforceable. It’s worth taking the time to research your state’s noncompete agreement laws. If you have additional questions, you can consult with a local employment attorney.

John F. Kennedy once said that “the time to repair the roof is when the sun is shining.” This is especially true for developing a plan to manage finances, healthcare costs, and other personal needs in the event of a layoff.

The first proactive step you can take to prepare for a layoff is to have a financial safety net. Most experts recommend having enough money to cover between three and six months of expenses. Although this can seem like an enormous amount of money for those just starting their careers, even setting aside a few hundred dollars, with a plan to add additional money when possible, is a great way to get started.

The second step you can take is to talk to family, friends, and others in your support system about your financial options in the event of a layoff. For example, would your parents be able to welcome you back home if needed? Could you take in a roommate? Are there jobs you can take on quickly for immediate cash, for example, for gig economy companies like Uber and DoorDash? Creating a backup plan now can help mitigate the stress of needing to figure it out on a moment’s notice.

Be sure to proactively use any employee benefits, such as medical, dental, and vision care or money in a flexible spending account (FSA) throughout the year. Staying on top of checkups (and prescription refills) can help lessen your stress if you become temporarily uninsured. It’s also worth noting that most insurance providers allow people to fill up to three months of prescriptions at a time.

When it comes to a possible layoff, it’s always best to plan for the worst and hope for the best. Taking time to develop a plan now can help reduce your stress if a layoff happens. If you’re interested in learning more about how advancing your education can help you learn new skills and increase your employability, discover how Maryville University’s online bachelor’s, master’s and doctoral degree programs can help prepare you for your future.

Recommended Readings

Moving Forward in Your Career Takes Focus, Determination, and Education

Finding Motivation and Purpose Through Maryville Online

Self-Improvement Books to Help You Achieve Personal Growth

Sources

Business News Daily, “New Report Suggests Americans Familiar with Unemployment”

Forbes, “How to Prepare for a Layoff Now”

Investopedia, “7 Effective Ways to Prepare for a Layoff”

Lifehack, “How to Prepare for a Layoff”

Society of Human Resource Management, “Many U.S. Workers Worry They’ll Be Fired”

The Balance Careers, “5 Ways to Prepare for a Layoff”