Times Are Tough — These Are the 3 Things to Do If Losing Your Job Is Inevitable

US-based employers announced nearly 30,000 job cuts in September, a 46.4% increase from the roughly 20,500 layoffs in August.

Job losses continue to mount across the nation on the back of rising inflation and labor costs – a 67.6% jump from the 18,000 cuts from September last year, according to a report by Challenger, Gray & Christmas.

Yet losing your job is not necessarily a disaster. Some people pivot toward a new career and even start their own business, which can be a positive change.

If you get proactive now, you'll reap benefits even if you never lose your job. In fact, you might decide to leave your job because you'll have created better options.

Nobody is indispensable. If you were to quit, would your employer go out of business? Hardly. Your loss might be a setback, but the company will move forward. However, this doesn't mean there's nothing you can do to reduce your risk of losing your job.

First, you can take on additional responsibilities. This makes it worse for your employer to lose you. Also, learn new skills. This way, if there's a need for those skills, your boss will turn to you rather than hiring someone new and possibly letting you go.

Sharpen your “soft” interpersonal skills. If you're hard to work with, you're likelier to lose your job earlier rather than later.

The best time to prepare for something bad that might happen is before it occurs. That way, you're less stressed and panicked, making you less effective. Take some steps ahead of time, so you are ready for whatever happens.

For example, write down your most marketable skills and strengths. Next, list all the positions or businesses that could benefit from someone with those skills and strengths.

After that, investigate the availability of those positions or business opportunities and score the plausibly available options from the above list by how excited you'd be to pursue them and how well they're compensated.

Figure out how important each is for you, rank them by a weighted score and order the opportunities by their composite score.

Finally, identify all your financial resources that could help bridge a loss of income for a few months. The longer your “runway” to get the next job or the first revenue from your business, the less stressful it'll be should you lose your job.

This process helps you see that losing your job doesn't have to be a catastrophe. You may decide to start proactively planning to leave your current position.

If you suspect a job loss is in your near future, you must prepare yourself financially.

Try to maintain or increase your liquidity. Avoid paying more than the minimum required on low-interest debts like your mortgage.

Consider opening a fixed-rate Home Equity Line Of Credit (HELOC) while you still have a salary, but don't borrow anything from it unless you have to. It's important to try and make this a fixed-rate HELOC since most are variable-rate, which can trap you as market interest rates rise.

Look at opening one or more new credit card accounts with zero- or low-interest teaser rates. This isn't intended to borrow now but rather to provide you with access to inexpensive credit if and when you lose your job. Once your salary goes away, you're unlikely to be able to open such accounts.

Cut your spending proactively now and add more money to your emergency fund. Increase your access to cash to help bridge the time between jobs and help you adjust to spending less, making your existing resources go further.

“Read your employer handbook to understand your company's policy regarding disposition of unused vacation and sick time should you be laid off,” said Danielle Miura, Certified Financial Planner and owner of Spark Financials. “Check to see if your company offers a severance package for employees who are let go. If they do have such a policy, it could help you bridge the gap until you start your next job.”

“If you're expecting to be laid off soon, try to pay off your high-interest debts. When your finances are tight, paying a high-interest loan will make it more difficult for you to pay off.”

Even if your salary continues for weeks or months, cut your spending right now just as you'd have to if your salary stops today. Also, ask your Human Resources (HR) people whether you can convert your unused paid time off to additional money.

Finally, consider speaking with a nearby financial advisor who knows the local economy and may also be familiar with the benefits offered by your company if they have other clients who work there. With their knowledge and experience, you may learn how other clients they work with negotiated a severance package at your employer that could give you a leg up.

Finances are not the only thing you need to consider. If you amicably part ways, your former manager might even recommend you to other employers.

Along this vein, consider asking your supervisor, and possibly points of contact with clients you worked with, for recommendations.

When networking, concentrate on listening rather than speaking. Be curious as to what your professional colleagues need, what they're excited about, and what they're afraid of. Then, try to make positive contributions by sending them relevant articles and connecting them to others in your network who may help them or whom they can help.

“If you haven't recently done so, update your resume… and your LinkedIn profile,” Miura said. “If you need help developing your resume or finding similar job occupations to apply for, check out onetonline.org. Also, find networking groups and platforms related to your industry, and join the most relevant one(s).”

It's important to look ahead and start planning for your next phase of work life. Besides looking for a job, do activities that keep you moving.

“Do the things on your to-do list that you've been procrastinating on, such as house chores and/or taking a (budget-friendly) vacation,” said Miura. “Find a hobby that interests you that isn't cost-prohibitive.”

Also, reach out to professional colleagues and arrange to meet with them periodically for coffee to nurture those relationships. When you meet, share what you're doing, but don't come across as desperate for their help getting a new job. If you do that, they're not likely to keep meeting you. It's too uncomfortable.

Instead, let them bring up ways you may be able to help them. This will open up new doors for you. Reach out to family members and friends you may not have had time to meet for a long time, and set up times to get together. Such relationships are crucial to keeping upbeat.

“Create a website to help display your achievements and interests,” Miura said. “Writing and posting articles on your website and/or other sites will show prospective employers who you are and what you bring to the table.”

Recessions are notoriously times when companies try to reduce their spending, which usually leads to layoffs. But by proactively preparing yourself emotionally, practically, and financially, you'll be ready to turn a possible job loss into a step up in your career.

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