Author’s Note: This is the second of a two-part series on how generations are viewing the job market and what you can do to ensure you are well prepared for whatever comes. View part one here.
In our last post, we talked about the impact of the US economy on the job market and how concerned people are about being laid off in the next 12 months. We also uncovered some positive outcomes from the POV of employers that may come from a more balanced job market.
Today, we will address:
- What plans do generations have if they are laid off?
- What advice would members of different generations give to survive a layoff?
Why do companies do layoffs?
Bad news is bad news. But, understanding the why can help many of us mentally cope with the aftermath.
So, you may find it helpful to understand the business rationale for layoffs. And, by understanding a bit more about why companies do layoffs, you are more likely to recognize when they are coming and be proactive to avoid or even profit from them.
Overall, the 300 people we interviewed were positive about the job market despite the difficulties many companies will face because of the recession. There will be a lot of job transitions as some companies thrive while others suffer and even go out of business. Here is what a few people said,
Having built a company from zero to 200 full-time employees and having been the CEO of a 400-person firm, layoffs are a normal part of any company’s lifecycle. There are a few reasons for this:
Reason 1: Obsolete function
Healthy companies are in a perpetual state of improving both profitability and growth. Put simply, they invest in systems, people, and technology that allows them to do more with less.
Here is an example from the warehousing industry: Hiring challenges, workers’ comp, and the promise of more efficient and profitable operations are forcing companies to invest in warehouse automation. Definitionally, automation is designed to replace people. By replacing people, companies realize a significant amount of savings over time along with productivity improvements.
Reason 2: Improved profits
Lower wages in other countries are driving companies to move jobs from the US. For many US companies that have 50+ employees doing a similar job function, like programming or QAing surveys, they can realize significant cost savings by moving those jobs to countries like Bulgaria or India. I know because I’ve done it. This isn’t an easy transition and is usually easy to spot if you are employee.
Reason 3: Economic downturn
This is the hardest one to cope with because employees usually don’t have visibility that there is an issue until they are laid off. And, as we enter a recession, this is what many of us will face.
In all cases, layoffs have nothing to do with the employees that are impacted. Tens, hundreds, or even thousands of your peers are losing their jobs too. You are not alone.
However, even with the knowledge that you are not alone, being laid off will likely put you on tilt. And, that is why it is important to have a plan while you are in a sane and safe state of mind.
What to do if you get laid off?
We asked 300 people what they’d recommend to those who have been laid off.
Our survey included a few video questions and here is what they said. Please note that I choose the videos that had the broadest representation of what was said. If you’d like access to this data, please email me or DM me on LinkedIn. I’m happy to share it with you.
As of today, August 8th, 2022, there is no question that companies are starting to do layoffs. Here are some helpful tips to ensure you are well prepared for whatever comes.
Tip 1: Stay positive and proactive
Here is one of our participants talking about the importance of being proactive and staying positive.
Tip 2: Start saving
Having savings is vital. This was the number one tip given by our participants who were 30+ years old.
Standard financial advice says you should have enough cash in your savings account to live on for three to six months. Sadly, according to research done by Bankrate, “51%, of Americans have less than three months’ worth of emergency savings”.
Tip 3: Create a budget
Having a budget is the best place to start when increasing your savings. As you go through the budget process, classify each of your expenses as “mandatory” or “optional”. This will give you two numbers:
- Your current budget
- Your emergency budget
Tip 4: Add margin to your budget
Margin is vital to successful planning for a difficult financial time. The most common rule of thumb for creating a household budget is that “At least 20% of your income should go towards savings. Meanwhile, another 50% (maximum) should go toward necessities, while 30% goes toward discretionary items.”
By identifying discretionary budget items you can remove, like $8 dollar coffees, you’ll be well prepared to react to whatever comes rather than trying to figure things out when you are emotionally and mentally on tilt.
Tip 5: Your network
The size and quality of your personal network are directly connected to the number and quality of the job opportunities you have. So, invest in your network.
Tip 6: Your skills
For most of us who have jobs, especially for a long time, we slow down or even stop investing in learning new skills or developing the ones we have. We need to be in a constant state of learning and evolving to keep pace with today’s work.
Tip 7: Side hustle
Developing a side hustle such as occasionally driving for Uber or doing some side consulting will ensure you are set up to lean into these income sources if you are laid off.
Tip 8: Minimum wage job (Be humble)
If you have bills, then you likely need an income. Too often people who are capable of doing menial labor but have spent the last 20 years in management simply can’t “lower” themselves for a few months. Not only can this help put food on the table but it may offer you a new perspective on challenges facing frontline workers which may serve you very well in your next gig.
Tip 9: Recruiters
Be sure to get to know the staffing agents and recruiters in your field. For market research, you can join the weekly MRxPros’ Virtual Lunch (DM me for a free invite) as well as the Insights Association to easily make those connections.
Tip 10: Unemployment and food stamps
Don’t be too prideful. These are services that you have paid into and are set up to help you get through tough times.
I’m thankful for the advice given by our participants. Through them, we have created the most comprehensive list of both preparation and survival tips to not just survive a layoff but thrive through it.
If you would like to learn more about this research or about how you can use HubUX to shorten timelines and save money, you can find me on any social platform or email me directly.
Happy researching! 😊