Involuntarily separated, downsized, terminated, laid off, made redundant, fired. No matter what name you choose, involuntary unemployment is never pleasant. Unfortunately, job insecurity is a fact of life for most modern workers. The best way to deal with this challenge is to be prepared.
Get Your Job Search in Motion
When you find out the ax is going to fall, don't waste any time: immediately start looking for a new job. If you are able to begin your search while you are still employed, do it. It's easier to find a job when you have a job, because being employed gives you credibility. It also enables you to negotiate salary from a position of strength. You have no negotiating power when you are unemployed.
Keep in mind that job searches can take a long time. A typical job search will take three to six months depending on the position and the market. If you wait too long to start your search, you may end up desperate for cash and willing to settle for the first offer that comes your way. This could lead to a significant pay cut. While the immediate income will help to pay the bills, the lower salary puts you in a weaker position when looking for your next job - the job that will put your salary back where it belongs.
In a declining economy, which is usually the time for job cuts, the longer you wait to start your search, the more competitive the job market becomes as procrastinators and the newly unemployed join the search. With all of these reasons in mind, it is important to get out and look for a job as soon as possible.
Even if you have a good job, your resume should be up to date. A resume is probably the most important document you will ever produce, so putting it together should not be done in a rush when you are desperate. Once your resume is ready, it will be there when you need it. (Find out how professional resume-writers can help you land the job you want, read Resume Scribes Seal The Deal.)
When you need to put your resume to work, reach out to your network. Send a copy of your resume to anyone that might be able to help you find a job. After that, post your resume online. There are a host of popular job search sites, and they are all useful tools.
Treat the job search as a serious task and devote a significant amount of time to it. Finding a job can be a full-time job, but the more effort you put into it, the better your chances of a smooth, quick transition. (Looking to land your dream job? Skip the entry-level position by avoiding common errors. Read Top Job-Search Mistakes For Finance Grads.)
When unemployment is looming, one major focus of your efforts should be on minimizing your expenses. This is the time to take stock of your financial situation. Stop spending and start saving. If you don't have a budget, now is the time to put one together. (Have a family to take care of? Read tips on budgeting after losing an income stream, in Consider The Outcomes When Cutting An Income.)
Don't touch your retirement savings. You put that money away for your future, and you're going to need it. If you spend it now, it will be gone. To keep up your cash flow, file for unemployment insurance as soon as possible. While unemployment checks won't replace all of your lost income, they will provide some assistance.
When you get the official word from your employer that you are going to be out of work, find out what the company can do for you. Ask about a severance package. Find out when your last check will arrive and determine whether it will include remuneration for unused vacation days and sick days. (For more insight, see The Layoff Payoff: A Severance Package.)
Get information about the Consolidated Omnibus Budget Reconciliation Act (COBRA) so that you can extend your healthcare coverage. Obtaining coverage when you are unemployed can be tough, so don't let the opportunity to continue your coverage pass you by.
Talk to your employer about outplacement assistance. The company may provide access to career counselors, telephones, computers and other resources. Lastly, make sure to ask for a letter of reference.
Prepare for Next Time
In an era marked by downsizing, outsourcing and scandals, job insecurity is a fact of life. Once you get back on your feet, prepare for next time by getting your financial house in order. You should build up your emergency fund, watch your spending even when you feel like you don't need to and minimize your debts.
It's also important to keep your skills current. If you need a degree, certification or advanced training to take your career to the next level, get it. Maximizing your skills maximizes your marketability. (For help with job hunting, check out Tips To Beat Tough Interviews.)
Consider taking a second job or opening up a small sideline business. Moonlighting at part-time employment gives you a secondary source of cash flow that can really come in handy if your primary income source disappears. It may even give you a start on a new career path. (To get tips on how to build up your emergency fund, read Increase Your Disposable Income.)
Ongoing vigilance is the best defense against involuntary unemployment. By getting your finances in order, keeping your resume and skills current and setting up a secondary source of income, you'll have done all that you can do to prepare for the possibility of losing your job.