How To Deal With A Job Loss

By Pinyo, on February 24, 2009

As someone who’s on the brink of losing his job, I have been doing my research and looking for employment opportunities. I can tell you that there are jobs out there, but it’s not easy to get one. With unemployment rate in record territory, companies can pick and choose whomever they want to hire, and they can do so at a lower salary than just a year ago — that is if they are hiring at all!

9 Tips To Help You Deal With Job Loss And Get Bank On Track

What follow is various tips I picked up along the way to help me deal with my potential job loss.

1. Make A Graceful Exit

Whether or not you like your job, losing it could be a traumatic experience; especially when you know that it’s tough to find another job right now. If you are handed the pink slip, it’s important to keep your emotion in check. Cry if you want, but don’t get angry. You don’t want things to get out of control for no good reason.

It’s better to leave a good term, rather than burning your bridges. Depending on your industry, it’s likely that you’ll run into the same people again, and you may need their help.

2. Don’t Sign Anything That You Don’t Understand

As part of the exit interview process, your employer will ask you to make a couple of decisions and sign a few things. Some of these a meant to help both you and your employer part way, but some are designed to limit your options and protect your employer against any future liabilities — i.e., in case you later figured out that it was a wrongful termination and you want to sue them, etc. In any case, you should ask for more time and don’t sign anything until you have time to review everything carefully.

In addition, there may be decisions that you want to make with your family instead of on your own. For example, What do you want to do with your 401k?, Do you want to take advantage of COBRA insurance?, etc.

They already fired you on their term, so make sure the exit process is on yours.

3. Seek Emotional Support

It may not sink in right away, but losing your job can be emotionally painful. No matter how bad you feel, it’s important to remember that you can always find another job and recover from this bump in the road. I recommend that you don’t keep your feeling welled up inside, instead share your thoughts and feelings with your family and friends. At the very least, this will allow you to get it out of your system.

If you’re lucky, your cousin’s neighbor may happen to be looking to hire someone just like you.

4. Ask Your Employer For Help

Most companies don’t simply cut you lose and sever all contact. Be sure to talk to the Human Resources department and see what kind of assistance they can offer to someone in your situation. Ask about severance pay, any unused vacation pay that they owe you, part-time or contract job opportunities, and job search assistance.

Also reach out to your former managers and colleagues to see if they are willing to act as your references.

As pointed out by Writer’s Coin, check your state’s Department of Labor regarding your unemployment insurance benefits (link for NYS).

5. Expense Control

Depending on your financial situation and the size of your emergency fund, you may have to implement an expense reduction plan. Assess what you have, your expenses, and review your budget. Cut back on unnecessary expenses, put away your credit cards, and put purchases on hold.

You many even have to go as far as selling some of you stuff that you will not need in the short term. Remember the most important thing to keep is all the necessities — i.e., food, shelter, medicine, etc.

To help you get started, check out Does Your Family Have An Emergency Plan?

6. Be Open To New Opportunities

You may be focused on getting a similar job to the one you had, especially if you like what you did. However, it’s important to be flexible in this economy. Don’t limit your job search to what you formerly did. Expand your search to include other jobs that you could do. And if you are flexible enough to relocate, be sure to look at jobs in other geographic areas as well.

Perhaps this is the time to try out something you always wanted to, turn your favorite hobby into a new career, or even change your career direction altogether.

7. Go To Work Every Day

While you are searching for a new job, it’s important to stay disciplined. Treat your job hunting and other related activities, such as, exploring new income opportunities, managing your expenses, and networking as a real job. Wake up and be ready to start by 9 AM, take your 1 hour lunch, and wrap up everything by 5-6 PM. This way you stay in the groove and use your time effectively.

Whatever you do, don’t become an unemployed couch potatoe.

8. Network. Network. Network.

Explore every networking opportunity that you can. Reach out to your former colleagues, customers, vendors, and contacts. Take advantage of all available channels such as telephone calls, emails, face-to-face meetings, and networking via the Internet. And as mentioned above, don’t forget your friends and family because they are not only your best links, but they will work harder than anyone else to help you.

If you don’t know about LinkedIn, I’d like you to check it out because I think it’s a superb networking tool.

9. Be Ready To Ace Your Interviews

As part of your preparation process, you should also do practice interviews. Do it by yourself in front of a mirror, with your spouse, or with your friends. The more you practice, the better you’ll become at it, thus improving your chance of success.

Additionally, it’s important to keep yourself well-groomed and physically fit, because first impression means a lot.

Conclusion

Personally, I hope that I’ll be able to keep my job. Unfortunately, it’s very likely that I’ll be using this list myself in a few months. If you are in the process of looking for a job, best of luck to you and I hope you find this list useful.

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Pinyo is the brain behind Moolanomy personal finance blog and a few other web sites. If you like this article, please subscribe for free daily email updates.

All posts by Pinyo

13 Comments

Four Pillars
February 24, 2009, 23:44

I don’t know if this applies to the US but in Canada, it can be worthwhile to go to a labor lawyer and get them to review your employment contract and severance pay. It costs $400 for an hour (which is all you need) but I’m told it is worthwhile.
Making The Best Better Team
February 25, 2009, 1:51

The list is indeed a very useful resource, not only for job seekers, but for everyone as well. It’s hard to lose your job in this very unstable economy. Let’s all hope for the best.

And I have a piece of advice – success is not by chance, it’s by CHOICE! So don’t despair when the going gets tough, you are tough and you will get going!
Neal Frankle
February 25, 2009, 10:09

This is really a great tip sheet.

My favorite is…..ALL OF THE TIPS!

I also know that, if asked, many employers will help. In this economy, they probably feel bad about letting people go and I think many people will do whatever they can to help.

Thanks
Miranda
February 25, 2009, 9:28

I like this list. I especially like the “don’t sign anything you don’t understand” point. I would also look at preparing to roll over any retirement accounts.
Debbie
February 25, 2009, 11:39

Instead of waiting for the inevitable job loss the state of our economy should be a kick in the pants to form the plan B our financial lives need. Read any book on wealth building and they will all tell you that the best way (some say only way) to achieve financial freedom is to be your own boss. When you work for someone else you will always be at the mercy of the economy, your employer, and taxes. Having your own business, especially one you can work from home, can provide an excellent source of income, tax write offs and more free time to do what you really want.

I love working for non-profits but they don’t pay enough so I started an online business that is paying well enough that in about 1 to 2 years I will be able to work for the non-profits without worrying about a pay check.

Don’t let job loss get you down. Take action to get your own future started.
pfincome
February 25, 2009, 21:30

Good to hear that you are being proactive instead of reactive to possibly losing your job. I think it always helps to be looking and keep your eye out for opportunities – no matter how secure you think your job is. Good luck to you in whatever happens!
Bocarat
February 25, 2009, 22:29

Here’s what I did the first week I got laid off. I ditched my cell phone.

Well, it wasn’t hard. I had a company phone but I had the option of keeping it and start paying for it on my own.

I thought prepaid phones might be funky but did some shopping and found out that I could still get a good, no-frills phone for around 20-30 dollars and didn’t have to sign a contract or even have a credit card or credit check.

It turned out that I got a phone from net10 and I’m VERY happy with it and can really control my costs.

I don’t give the number out to everyone and that helps too, and I can control the costs up-front. Sweet!
Writer's Coin
February 26, 2009, 6:37

One big thing is missing: filing for unemployment. That should be the very first thing you do before starting these tips, don’t you think?
Bear
February 26, 2009, 17:45

These days, being unemployed, or expecting unemployment, is scary indeed. If you’ve been laid off, it’s ok to allow yourself a few days on the “pity-pot.” After this, it’s time to hunker down and develop an action plan. Treat your job hunt just like any project you might tackle at work: create a task list with goals and due dates.

My advice to job seekers: do your best to network and locate contacts you may have in a target company. Avoid clicking the ‘Apply Now’ button on the job boards — you’re competing with thousands of others and the recruiters are overwhelmed. Find a way to get noticed by hiring managers – get a phone number and/or email address and get your resume in front of them.
Miguel
February 27, 2009, 18:05

These are some great tips. In addition to Writer’s Coin’s tip in filing for unemployment, a couple of additional recommendation should be to update your resume. With so many people seeking a job, people need to be creative and leverage tools to make sure they are noticed by prospective employers. Earlier today, the following article was posted that includes all kinds of helpful information for people looking for a job: Job Searching With Social Media. One more interesting site is Visual CV.

The reality of job loss is that no one knows when or if it will really happen, which means it is critical to prepare for the unexpected. At least, that is what we recommend to our policy holders at State Farm. As you outline, activating these steps requires some preparation in the event of a losing a job. That means evaluating personal finances by establishing a monthly budget and regularly putting money way into an emergency.

We often urge our customers to incorporate the cost of potential insurance deductibles – auto, home, health, and others – in the event a claim.

I’m curious to know what your thoughts and perceptions are about the role insurance plays when facing unemployment.
andy
February 28, 2009, 19:37

Sorry about the news Pinyo. But you always have this blog to fall back on, which I am sure is doing well for you. All your tips are spot on, but at the end of the day dealing with a job loss is tough and family support is key.
Do You Dave Ramsey?
March 7, 2009, 12:00

Great advice Pinyo… I am actually ‘living’ this advice as I navigate my layoff experience and I can vouch for every step you outline… great advice and keep up the good work.

Dave
Pinyo
March 9, 2009, 12:29

@Four Pillars – Depending on the situation, a visit to the lawyer may be worthwhile for some people.

@Debbie – I completely agree with your statement. In fact, I advocate building multiple income streams as a career in one of my article.

@PFincome – Thanks, but I have to admit that I need to be more aggressive with my job search.

@Writer’s Coin – I updated my article with your suggestion about unemployment. Thank you.

@Andy – Thank you for the compliment. I wish I can fully fall back on my blog, but it’s only generating about 25% of my total income right now. I still have a long way to go.

@Dave – I wish you the best of luck with your job search. Keep us posted on your blog.

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