How To Prepare For A Layoff

This is a blog post I hate to write but is needed in this time of uncertainty. Layoffs will be a reality for millions of Americans and others worldwide. We are already starting to see the effect of COVID-19 on businesses. First-time unemployment claims increased 70,000 for the week ending March 14, 2020 and are only expected to rise further in the coming weeks. So many sectors have been hit with layoffs. Arne Sorenson, the CEO of Marriott, put out an emotional video where he spoke about tens of thousands of furloughs of Marriott employees as travel has come to a halt with the pandemic and travel bans. In so many other industry sectors the news will be just as dire. So what can you do if you think you might be laid off or furloughed? I have a few suggestions that might help.

Be realistic. No one is too valuable

There is a lot of denial when it comes to layoffs. People tend to think that their work is more important than others and therefore, they will be retained. I thought the same thing back in 2008. The company where I was working was through a financial struggle. I was the head of HR and was asked to layoff my entire staff. I was unhappy to do this thankless chore, but I understood the need to take drastic measures. What I did not expect was shortly after I did this, I was called into my boss’s office and given the same news that I had just given my staff. All I could think about was how I could be laid off. Who was going to do HR? They needed me. Well, when push came to shove, HR was expendable, just like many positions. Don’t think you are immune to a layoff. It can happen to anyone at any time.

Continue to demonstrate your value to your organization

You never can go wrong by doing your best. In our current situation, showing that you are a valued employee that has the ability to do many things well is an asset. When it comes to layoffs, each company will have different criteria that will be used to figure out who will be let go and who will be retained. Performance is often one of the criteria used. Showing that you are committed and have both problem-solving skills and are flexible when encountering new situations could be the deciding factor as to whether you are retained instead of a co-worker. Your best hope of being retained is to either be in a critical position or be excellent at what you do. If you are good at what you do, you often will have management fighting to retain you. If you are just okay or appear less committed, management will put you at the top of their layoff list.

Gather important information now - performance reviews, awards and recognition, project work or work samples. Don’t wait. Find this information and make sure you retain a copy of what you might need for a job search. This information will be useful to demonstrate accomplishments and the quality and breadth of work you have been involved in with your employer. One caveat: Please be careful of anything that is confidential or you could not discuss or disclose with a potential employer due to a confidentiality agreement.

...and that includes your contacts

Many people, especially if you have been with a company for a while, may have your business contacts on your company’s systems, like Outlook. This will do you no good if you are unexpectedly laid off and no longer have access to corporate systems. Now is the time to download your contact list so you have it available to you in the future.

Update your resume

As a Career Coach, I have always said people should have their resume up-to-date to take advantage of opportunities that may come their way. Now, this isn’t a nice-to-have, it is a have-to-have. Take the opportunity to at the very least update your resume with your present work information. If you have more time, review your entire resume to make sure it is highlighting your accomplishments throughout your career. You can look at my video of 31 resume tips and my blog post about adding accomplishments to your resume for help with writing your resume.

Network

Now is the time to reconnect with your network. Be a good colleague, friend or classmate and check in with people in your network. As people are isolating themselves in their homes, social contact is still important. Reach out to people to see how they are doing. Offer to help, if there is any way that you can make things better for another. It is okay you share your concern about your employment situation - people will understand even if they are not in the same situation. Your job is to keep your name top of mind to others. That way, if you do find yourself out of work, you have people who can let you know of opportunities or in whom you can find support.

Who would be a reference for you?

When you are in a job search, you need to plan for people who can act as a reference for you. If you have been a good performer and you are comfortable, ask your manager if s/he will act as a reference for you. It may be against the policy of the employer for managers to act as a reference, but even so, many managers will be happy to do this, especially if you were laid off. If you are planning to use anyone to act as a reference at your current employer, be sure to get personal contact information in case that person also is part of a layoff. 

Non-Compete Agreements

For many, part of the hiring process was completing company paperwork that may have included a non-compete agreement. Now is the time to read through the paperwork to refresh yourself with the terms of the agreement. Especially important to review what restrictions are in place for working with other companies and whether the agreement is still in force in the case of a layoff or furlough. If you feel that the agreement is too restrictive to your ability to find other work, ask during any layoff meeting whether the company would be willing to waive all or parts of the agreement. If they will, make sure you get this in writing. Also, know your state laws surrounding non-compete agreements. Many states, such as California, ban these agreements. Educate yourself about what is and not allowed in your state. 

Rainy Day Fund

With the COVID-19 keeping people at home (except for essential workers), most people have sharply curtailed their spending. Except for online ordering or takeout from restaurants, there just is not a lot to spend money on. This is good practice for building up your rainy day fund. Everyone should be mindful of saving money for a time of being out of work. Obviously financial professionals have always admonished people to have 3-6 months of living expenses saved in a safe place for those times when income is not coming in. If you do not have that amount saved away, which is not unusual, do your best to start doing what you can to build up your rainy-day fund by cutting discretionary expenses as much as you can. Even if you believe your employment will continue, this is a good lesson that hard times can happen to anyone at any time. You can ride it out better if you have a bit of financial cushion to rely on.

Severance

If you are laid off, you may be provided with a severance agreement to review and sign. Severance is an agreement by a company to provide additional compensation after you are terminated from an employer in exchange for you signing certain rights away. The severance could be structured in many ways, but often is either a lump sum or pay continuance for a certain number of weeks. Depending on the employee’s age, the state of employment or whether the employee is part of a mass layoff, the terms of a severance agreement may be different. If you are aged 40 years or older, you must be given 21 days to review the offer of severance. This is a requirement under the Age Discrimination in Employment Act and as amended by the Older Workers Benefit Protection Act. If you are part of a group termination, you may be required to have even more time to sign the agreement. An employee under age 40 is not required to be given the same amount of time, but many employers apply the same guidelines. If you are over age 40, you also have up to 7 days to revoke their waiver.

A severance agreement may run multiple pages. Make sure you read and understand everything that is written. If you have questions, make sure to ask before you sign the agreement. You need to understand the terms of monetary compensation, any continuance of benefits, including health benefits, as well as any outplacement services that are offered. You may be able to negotiate all or parts of the severance agreement. As with many things in life, if you do not ask, the answer is always no. It is always best practice to try to sweeten the deal. Just know that if it is a mass layoff, the company may not be willing or able to change the terms given.

Unemployment Insurance

If you are laid off, the first thing you should do is contact your state’s unemployment insurance office to see if you qualify for unemployment payments. Each state has its own formula to determine whether you qualify, eligibility period, and what the payment amount will be. This site has a link to unemployment offices in all 50 states.

What happens with your benefits

If you are part of a mass layoff, the HR team should be giving out information about your current benefit programs and what will happen upon termination. If you are not given this information make sure that you ask. You will want to know about COBRA and how you can continue to be covered for health insurance during your time of unemployment, what will happen with any retirement plans that you participate in (and what will happen if you have any outstanding loans) and whether things like life insurance can be converted into a personal plan. This tends to get overlooked when one hears the news of a layoff, but it is important to know what will happen so you can make good decisions about these important benefits.

Thinking about getting laid off is scary. Getting laid off is even scarier. For some, this will be the first time it has happened to them. For others, they already know the drill. I hope you are lucky and can retain your job. But as we have seen already in the travel and hospitality industries, if there is no work, it is an inevitability. You may not be able to forestall a layoff. What you can do is plan ahead and be prepared as best you can. As someone that had this happen to her, it sucks. No way to sugar coat it. I did survive it, though, and when I look back at it, I grew professionally out of that experience. I hope we can all make lemonade out of lemons.

Shelley Piedmont is a job search coach. She wants to help job seekers put their best foot forward by providing the tools for a successful job search. If you need career coaching, resume preparation, interview skills assessment or LinkedIn profile assistance, she can help. Schedule a 15-minute no-obligation consultation.