How to Prepare for Losing Your Job

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Find Employment!One of the most traumatic financial disasters you can face, and millions of Americans have in the last two years, is losing your job. The key to bouncing back on your feet is to prepare for it ahead of time. There are plenty of things you can do that will soften the blow of being fired, though nothing will completely dampen it, and as long as you put some things in place you can make your life a little easier for the next few months.

The general idea behind the tips in the “While You Have a Job” is to setup a scenario where you don’t feel like you’ve been thrown into the middle of the Pacific Ocean without a life preserver. You want to set things up so that if you are fired, you can bounce back as quickly as possible and those tips, hopefully, put you on that path. The tips in the “When You Are Fired” are a little less novel because the general strategy for finding a new job is pretty well laid out.

I hope this latest edition of the Financial Contingency Plan series helps you out!

While You Have a Job

Build up a Network
With the exception of my first job, all of my subsequent careers started with a referral from an existing employee. If you’ve been working for quite some time, you’ve probably developed a network of friends and associates you can call on in the event you are let go. The economy isn’t in the best of shape at the moment so employers are not eager to hire on new employees before knowing their future business prospects. If they are, they will likely turn to their existing employees for help since a referral is better than a random person off the street (or screen).

It’s important to build up and cultivate your network so that you can feel comfortable asking them if they have any openings.

Refresh Your Resume
I recommend updating your resume every three months (or six, depending on how busy you are). By refreshing your resume often, especially when you don’t need to, you don’t feel any pressure. You also get to do it on a clear mind with a good memory of what you’ve accomplished over the last three or six months. If you are forced to recall several years of work at a moment of crisis, you will probably forget something important or remember it imperfectly.

Build up an Emergency Fund
Since you currently have a job, make sure you are saving towards an emergency fund. If you are fired, you need confidence that a six or twelve month financial safety net will give you. You will get unemployment benefits, which will soften the blow and strength out that emergency fund a little more, but its your emergency fund that will supply the bulk of your spending until you find a new employer. Start saving now.

When You Are Fired

OK, it seems a little fatalistic to title this section like that but it’s the truth (and hopefully you’ll never have to use this advice!), this is what you need to do if you’re fired:

  • Take a day (or week) off. Do something fun, do something you’ve always wanted to do, volunteer, and pretty much just unwind and relax. Let the shock of being fired subside, so you can find a job without the specter of “failure” (there are plenty of reasons unrelated to you as to why you were let go). Heck, pretend the company went out of business even if it didn’t, just do whatever you need to get you in the right frame of mind.
  • Apply for unemployment benefits, you do so with the Labor Department of your state. This can take some time to process so do so as quickly as possible.
  • Keep busy outside of applying by doing some more volunteering, consulting, or having fun. You may discover a job out of it but mostly it’ll keep you busy and less crazy.
  • Sign up to online job boards and start finding headhunters who can search on your behalf.
  • Send out resumes and cover letters, tracking what happens to each. Set goals for yourself to help motivate you (send out 5 tailored resumes and letters per week).
  • Review Bargaineering’s Career Week for additional tips.

Losing a job can be very traumatic, but if you prepare for it and enter it in a good frame of mine, you’re much more likely to find success sooner. Don’t worry if you don’t “bounce back” quickly, no one expects you to, but regaining your confidence and your composure is absolutely crucial.

(Photo: theclevelandkid24)

{ 21 comments, please add your thoughts now! }

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21 Responses to “How to Prepare for Losing Your Job”

  1. billsnider says:

    You left one important step out. Leave with dignity and a smile.

    I have seen all to many cases where someone uses this moment to shoot their mouth off. They curse, throw things around and get a bit violent. For sure they cut off any oportunity to return.

    Also this hurts referrals. This can be from your current boss or HR who will remember this when s/he gets a referral call.

    And don’t forget your fellow employees. You don’t want to alienate them. You need all the help you can get.

    One last point. This is really a small world. In my work career I have met people who knew someone who knew someone who is someones current boss. You want a positive spin on this converstaion. Don’t screw yourself.

    Bill Snider

    • zapeta says:

      Agreed completely. You want to leave on the best terms possible and not alienate anyone. Your contacts are your best resource for finding a new job.

    • Martha says:

      This is absolutely imperative. If you were laid off for reasons that weren’t due to your work then you have a much greater chance of being rehired when the time comes. Or getting a referral/reference! Don’t burn your bridges.

    • fairydust says:

      I have a question pertaining to this. I totally agree with the concept of leaving with a smile and being polite, not burning bridges (it’s certainly helped me). On the other hand, there is usually someone from HR assigned to give an exit interview, and as someone who used to work in HR, I really did want an honest assessment of things that were a problem from the exiting employee’s POV, areas that could be improved, things their manager needed to work on, etc. So how do you say honest, hopefully helpful things without burning potential bridges? Just curious how others would handle this. Thanks!

      • Jim says:

        I think you can be straightforward and honest without burning bridges, just remain professional and calm. Bring up institutional problems, rather than personal conflicts, because HR can try to resolve institutional issues but will have little power, or interest, to fix personal problems you had with someone. If you felt your were underpaid vs. the market, say so. The HR person has no emotional attachment to you, unlike your manager who will have to find a replacement, so I think you can all remain professional through the exit interview and learn something from it.

      • billsnider says:

        I agree staying professional in the exit interview and to stay positive.

        However i will also tell you that if they see a problem (in my companies case), they wrote a report to the CEO, manager of HR and the supervisor. The supervisor was then put into a precarious position.

        So I say be very CAREFUL in that exit interview. You will not win any point and it can backfire on you.

        Bill Snider

  2. As someone who was just forced retired, I can tell you you’ll never be prepared for it. As Bill Snider says, the most important thing is to leave on good terms with your former employer, no matter how you really feel. You need the reference and former colleagues can sometimes help you identify new job opportunities.

    One mistake I made was not having an up to date resume. I was able to put one together in a couple of days, but it would have been easier with the experiences fresh in my mind.

    Also, it is important not to think of yourself as a “failure” because you have been RIF’ed. In my case they RIF’ed all mid-level executives with over 25 years service and threw in enough people with fewer years service so they couldn’t get sued for age discrimination. The RIF had nothing to do with job performance and everything to do with cutting salary, benefits, retirement, etc.

    On this bright side, this could be a liberating experience and lead me into new areas I wouldn’t go as a salaried employee.

  3. Shirley says:

    “Leave with dignity and a smile.”
    I agree with you, Bill.

    I have seen excellent referrals destroyed by not doing this. Your dignity is yours to hold, so keep a good grip on it.

  4. Jonimak says:

    Also, don’t hide the planning from the most significant people in your life. By including them, you are all better able to keep the “prepared for new opportunities” mindset.

  5. justin says:

    “(send out 5 tailored resumes and letters per week).”

    Snicker, snicker.

    Either you are talking about someone with savings for years of comfortable unemployment, or you made a serious typo =) You *did* mean send out 5 a day, right? @2 month and 300, hoping there might be a call here or there before too long…

  6. CB says:

    Does one get unemployment if actually fired?

    • fairydust says:

      depends on the reason. things like being fired for gross misconduct, for example, probably won’t qualify for UE. But being laid off because there’s no work is totally UE-worthy. The best bet is to file no matter what, then the former employer will respond with a yes or a no (and their reason), then you can always appeal. Having worked in HR, I’ve seen appeals go both ways, so it pays to try.

  7. BrianC says:

    I highly agree about keeping your resume up to date. It definitely removes a lot of stress when you have an application deadline and already have an up-to-date resume to work with.

  8. That’s a great point about letting the idea that you were fired subside. Some people panic and that won’t help the situation at all. Also, you may find something that you enjoy besides what you were doing at work and go in that direction for work.

  9. Having a plan B is always important. In the process of reading the newest book by Robert Kiyosaki, definitely a book worth reading, perfect for this discussion.

  10. laidoffandlovingit says:

    Yeah, be nice one way out. What good does it do you to let them know they got to you? As far as the “exit interview” crap, who cares? After they axe you, they want you to do THEM a favor and be candid? hah. If you say anything meaningful it will be buried, and anything else will be because you are a malcontent. If they really cared all that much they would be asking you while you were still a member of “the team.”

  11. jsbrendog says:

    ugh, i know i need a resume, and i realllllly should have one, but i am just so damned lazy….

  12. StephenB says:

    Consider starting your own business. In this day and age with as many businesses going under as there are, the last person out the door is the owner of the business. If it is a small business with few enough details that one or two people can handle, you are better off. You are then only dependent on your own ability to produce. Keep the ability to barter in mind as you do this. With what is happening to our currency as well.

  13. Hazzard says:

    I tend to practice just about all of these techniques. I’m always anticipating the potential of losing my job, even though I’m considered a high performer. You just never know! I’d rather be over prepared than under prepared for a job loss. I think networking is absolutely critical. It would be interesting to see a statistic on how many people find employment through someone they know vs through the newspaper, Internet, etc.

  14. Herbert says:

    I have just been retrenched. When they told me I just smiled and nodded, which really got them off track. I had prepared my resume and started contact with my agency and had enough money in liquid investments to live well for more than a year (house and car paid off, no credit card debt). I got 4 weeks of fully paid stay at home (they didn’t want me to keep working in that period) as well as a 6 weeks pay package plus unused holiday paid out, with outplacement support thrown in. I applied for unemployment benefit and got it once the waiting time was over, which supports the money we have got nicely. I got bored sitting at home so I have started my own business to keep me occupied for the two years to my retirement. (In Australia).

  15. Margo says:

    I am an independent contractor so if I lose my job, no unemployment benefits. My husband is on disability and we could get by on his income for essentials for a few months, but I need to get than emergency fund in place. I absolutely can’t start it until mid October for some personal reasons, but at that time can sock away $250 per month, and possibly more, depending on income, which goes up when I can get the extra work.

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