No one ever wants to think about being laid off but for most people, it’s nearly always a possibility.
Whether you feel like a layoff may be coming or you simply want to be prepared just in case, there are a few steps you can take now to soften the blow.
In this article, we’re going to look at seven things that you can do immediately to prepare financially and professionally for a layoff.
7 Ways to Prepare for a Layoff
If you think you might be laid off at some point, the best thing you can do right now is to get prepared. The following seven actions will help you maintain financial stability and put you in the best position professionally in the event that you do lose your job:
- Build Your Savings
- Stop Nonessential Spending
- Prepare Your Creditors
- Know (and Use) Your Benefits
- Update Your Resume and Portfolio
- Research Your Career Field
- Begin Networking
These are all great ways to get ready for a potential layoff. Even if you aren’t completely sure that you’ll find yourself unemployed, each of these steps is worth taking and can only help you in the long run either way.
1. Build Your Savings
The first thing you’ll want to do is establish a strong savings account.
“The number one recommendation is that you do everything you can to reduce your spending and build up your savings,” says Clark. “It will help you if you do get laid off and it’ll certainly be helpful to you if you don’t.”
When it comes to credit card debt, Clark recommends dropping these payments to the minimum as one way to increase your savings.
“If you normally would pay your balance in full (unless you have very large savings) you might want to consider doing something you never hear from me, and that’s paying minimums on credit cards so that you have more cash and more flexibility available if you’re expecting a layoff,” he says.
2. Stop Nonessential Spending
The best way to save money in preparation for a potential layoff is to eliminate any nonessential spending.
Immediately cut anything out of your budget that isn’t absolutely necessary.
“The most important thing for people who are fearing a layoff to do is to stop every bit of nonessential spending that you can,” Clark says. If you aren’t sure where to start, consider reducing these expenses:
- Dining out
- Subscriptions and memberships
To get started, take a close look at your essential spending and budget. Go through what bills you have and figure out what your priorities are going to be if you are laid off. That will give you an idea of how much spending you’ll need to reduce in order to save for your non-negotiable expenses.
3. Prepare Your Creditors
Once you’ve looked at your bills and how much you’ll realistically be able to pay if you’re laid off, you may find yourself having to make some tough decisions.
If there are bills you know you aren’t going to be able to pay, keep in mind that early contact is key. Aside from absolute necessities like food and shelter (rent or mortgage) everything else can be flexible.
If a layoff seems like a real possibility, be sure to talk to your creditors ahead of time and figure out what your options are for reducing interest rates or delaying payments. Once you know your options, planning for a potential layoff becomes much easier.
4. Know (and Use) Your Benefits
Before a layoff occurs, take the time to familiarize yourself with unemployment benefits. This will help you better plan and prepare for a potential layoff. Specifically, be sure to utilize your job’s benefits before being laid off, and don’t forget to explore health care options.
If you’re still employed and suspect a layoff may be coming, your instinct may be to cut your retirement contributions in order to build your savings. Still, if your employer provides a match of any sort, Clark recommends maintaining at least the minimum contribution.
“If you’re in a 401k and there’s a match, even if you cut your contributions just to grab all of the employer matches, that’s still worth doing even if you’re fearing a layoff,” Clark Howard says, “because that match is still so valuable to you.”
Take advantage of free money in any way that you can, including your employer’s match and any severance pay. Also, understand your state’s unemployment benefits and research health care options.
5. Update Your Resume and Portfolio
In addition to the financial aspects of preparing for a layoff, you’ll need to think about your potential upcoming job search.
Regularly updating your resume is a great way to stay prepared for opportunities and setbacks alike. If you haven’t updated it in a while, take the time to pull it up and see if there’s anything you can add. Consider these things:
If there’s anything for you to add, add it
For more ways to improve your resume, check out these secrets to resume success. You’ll find nine tips to make your resume stand out including how to rework your objective statement, what to include in your areas of expertise and what to leave off.
Once your resume is up to date, consider any other documents you may want copies of before leaving the job. This could include performance records or work samples you’ll want to include in a portfolio. It’s also not a bad idea to update and/or check in with your references.
6. Research Your Career Field
While you’re preparing for a potential job search and updating your resume, take the time to do a little research on your career field.
Brie Reynolds, Career Development Manager and Coach at FlexJobs recommends looking at the trends over the last 5-10 years. “Is it a growing or shrinking field?” Brie asks. “If it’s shrinking, it may be time to start exploring other career options for a potential change into a stronger field.”
You can use the Occupational Outlook Handbook on the U.S. Bureau of Labor Statistics’ website to see the projected career growth rate and job outlook for most common careers.
In addition to knowing your career field’s trends, Reynolds recommends reading a few current job descriptions for your type of work. If you find that you’re missing any knowledge areas, software programs or certifications, make a plan to work toward those now.
7. Begin Networking
Even if you’re not sure that a layoff is coming, it never hurts to strengthen your network. Reynolds emphasizes how easy it is to maintain your network and how valuable it can be:
“Update your LinkedIn profile and start making connections with people, or reconnecting with others,” she says. “Send messages to people in your network who you feel may be able to offer help in the event of a layoff. And start making new connections.”
Websites like LinkedIn make it easy to connect with potential employers, clients and other professionals. In addition to connecting virtually, be sure to talk with friends and family about finding new work. You can also attend local networking events as a way to expand your network and learn more about potential new jobs.
Even if you aren’t actively looking for new work just yet, knowing what opportunities are available will give you an advantage if the time comes.
Remember, if a layoff seems even remotely possible, be sure to follow these steps: Create a strict budget and stop any nonessential spending. Build your savings while you’re still working, talk to your creditors and know your benefits. To find new work, make sure your resume is up-to-date, research your career field and begin looking for new opportunities using your network.
If you’ve done these things, you’ll be prepared both financially and professionally once you’re actually laid off. If the layoff never comes, then you can rest assured that you’re ready for anything.
Have you experienced a layoff? Share your tips and advice to help others prepare in the comments below.
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