In these economic times, job security is a notion from the past. All workers should be prepared financially for the possibility of a job layoff. Here are some tips to help with that process:
- Stay on the lookout for signs of potential cutbacks. Those signs could include layoffs at competitors, declining financial performance, top management changes, or a major tightening of expenditures. Under federal law, only companies with 100 or more workers are required to give 60 days notice of layoffs or plant closures.
- Set up a cash reserve of at least three to six months of living expenses. It typically takes at least that long to find a new job. It may take even longer in this economic environment or if you are middle-age or older.
- Apply for a home-equity line of credit or other type of loan. It is usually easier to obtain credit when you are employed, so get borrowing options in place to help during a layoff.
- Look for ways to cut your living expenses. Avoid nonessential expenses like extravagant vacations, clothing, and entertainment. Even if you aren't laid off, you can use those savings to increase your retirement savings.
- Keep your resume up to date. While you may not want to actively start looking for another job, be aware of the current job market and expand your professional contacts.
- If faced with a layoff, don't just accept your employer's severance package. Try to negotiate for more severance pay or for an extension of your health insurance benefits. Also check whether the company offers services to help you find another job.