While Friday’s August Jobs Report showed some growth (the economy gained 315,000 jobs for the month, dipping from July’s 526,000) the unemployment rate ticked up slightly to 3.7%, up from July’s 3.5%. Many companies are reporting a struggle to grow post-pandemic, particularly those whose growth from March of 2020 was buoyed by stay-at-home orders. Companies that flourished during the pandemic — Peloton, Wayfair, Netflix, Shopify, and Zoom, to name a few — have reported losses recently, and are now navigating layoffs. Most recently Snap, the parent company of Snapchat, announced a layoff of 20% of its staff, around 1000 workers.
But before you worry, it’s important to note that this dip for August jobs wasn’t entirely unexpected. As Ben Casselman notes in The New York Times, “moderation in the labor market might have begun.” In other words, the interest rate hikes we’ve seen from the Fed so far this year may be doing their job — helping to cool off the job market just enough to bring down inflation, but not so much that unemployment skyrockets. In other words, all those efforts made to achieve that soft-landing (enabling us to avoid a recession) may just be working. In other words, a slight increase in the unemployment rate right now doesn’t mean what it might have in a different economic moment.
Of course job loss is always terrible for everyone who experiences it, and for workers who have enjoyed the wiggle room to ask for raises, or change jobs for higher pay, this could signal that the ball may soon slide back onto employers’ courts. If you’re worried that a layoff could be in your future, here’s a look at what you need to know to prepare., and how you can combat the uncertainty of layoffs. And if the pink slip never comes, you’ll feel better prepared for whatever life tosses your way.
Acknowledge the emotional trauma
This state of limbo — a “pre-layoff” period — can trigger emotions that are just as intense as losing your job. Your brain hasn’t yet gotten the message that nothing has actually happened yet, so there’s no closure — nothing yet to grieve.
This heightened, constant state of fear is exhausting. It also makes people operate in the extreme, says Maggie Craddock, founder and president of the executive coaching firm Workplace Relationships and author of the forthcoming “Lifeboat: Navigating Unexpected Career Change and Disruption.” It makes us freeze (procrastinate) and clouds our heads.
What’s worse: We’re not just dealing with an isolated situation. “Usually if someone gets laid off it’s only their problem,” says Linda Matthew, an accredited financial counselor and owner of MoneyMindful Personal Finance Coaching. “One of the things that makes this so difficult is the not knowing.” “Now it’s all of us.” If you’re a two-income family and your partner is also worried about layoffs, that’s double the emotions in your household.
Matthew advises the clients she has been seeing to let their emotions percolate, to “breathe in the fear” and let the body process it. Otherwise it will linger. “It sounds very dramatic, but if you give it some time you’ll see that we can and do in fact survive with these emotions.”
Plug in with management
Knowledge is power — and these days it’s an essential nutrient for a nervous brain. With so many things up in the air, any information about your company’s health or future plans will help anchor you.
“If it’s possible, stay in discussions with your manager about where your company is going,” Mathew says. Understand that many companies are unable to make solid long-term plans. But even a week-by-week view of the state of affairs can be grounding.
Reinforce your financial safety net
The moves to make if you’re worried about a job layoff aren’t much different than standard non-pandemic financial advice: Spend less than you make, save for a rainy day, keep your skills up to date and make no rash financial decisions.
What’s different during a period of mass layoffs and economic uncertainty is that trussing up your finances will really help relieve layoff stress.
The most important money in your financial arsenal right now is your emergency fund. While you still have income coming in, build this short-term cash cushion to get you through if you lose your job. “It can be really comforting to look at your balance and know that you could cover your expenses for five months, for example,” Mathew says.
Reassess how much you really need to earn
Everyone’s spending looks different now than it did just a few months ago. Most people’s expenses (groceries withstanding) have dropped due to the coronavirus restrictions, making this the perfect time to get a realistic idea of how much money you really need to get by.
If you’re facing a layoff, it’s tempting to focus on how much money you’ll have to make if you lose your job. Here’s a different way to assess how you spend money: Think instead about the type of life you want to live, not just the things you want in your life. Craddock describes this as the difference between your “standard of living versus your standard of being.”
How predictable does your cash flow need to be to feel safe?
For most people, the most satisfying things in life — spending important moments with loved ones, getting a spare hour to read a book — cost very little. That should be a relief for anyone who fears a drop in income due to a layoff.
As you assess your spending, identify cuts you can make. Since “recreational spending” has gone down during the lockdown, you’ll probably find a lot of expenses you can easily trim. Making cuts before you go through a layoff will help you:
- Free up more money to sock away in savings: To make it easier, don’t think of spending cuts as a permanent state of denial, Mathew says. Reframe the new rules. Instead of “I can’t buy any more new clothes,” think of it as deferring a purchase (e.g. “In November I can buy new clothes”).
- Show you if you can live on less: Lowering your current cost of living also affects your future salary needs. And if you are laid off, then you can be confident that you’ll get by, even if a new job pays less than your old gig.
As you reassess your income needs, also consider how predictable your cash flow needs to be to feel safe: For example, Craddock says, “Some people could work on commission and be fine. Others need a regular paycheck.”
Take a professional inventory
In a layoff situation your two most important assets are your skills and your network. “For people who are fearing a layoff and those who find themselves unexpectedly caught up in it, think of your established skills and your contacts,” Craddock says.
Be proactive and reach out to the people you know at other companies in your field. Compare notes, talk about what’s happening in the industry, schedule a Zoom coffee. Doing it while you’re employed makes it less awkward if you eventually need to send that “I just got the axe, have any leads on who is hiring?” note.
On the skills front, make sure that your online presence reflects your most recent work and accomplishments. If it doesn’t, spruce it up. We have tips to update your LinkedIn profile and add that dazzle that’ll set you apart from the herd of job hunters.
Work on a post-layoff job search plan
It might feel premature to plot your post-layoff path before you’ve lost your job. But, again, doing something productive is a good way to combat anxiety and regain a sense of control over your destiny.
To start, Craddock says to consider three potential paths to follow — each one relying on what you can do, who you know, or both. “The route you choose will depend on where you fall on your professional risk spectrum,” Craddock says:
- Use your Rolodex (aka LinkedIn) to find similar work at a different firm (taking your marketing skills and doing in-house marketing for a vendor you used at your previous job)
- Use your skills in a different way to work with an existing contact (e.g. switch from marketing to doing P.R. for a former client)
- Hit reset and pursue work that uses a skill you cultivated earlier in your career before you shifted gears.
The bottom line: Right now is a period of chaotic crisis. Layoffs are just one of the many things crowding our minds and keeping us up at night. It’s hard to plan for the unknown future, but there are things you can do to ease your anxiety about it and come out stronger on the other side.
“This is not the “new normal,” Craddock says. “Whatever ‘new normal’ emerges, we have an opportunity right now to prioritize what makes our lives worth living.”
More from HerMoney:
- How to Update Your LinkedIn Profile to Stand out From the Crowd
- How To Nail A Zoom Job Interview
- How To Speed Up Your Job Search And Make Yourself More Marketable
MORE MONEY TIPS TO HELP YOU NAVIGATE LIFE: Subscribe to HerMoney today for free!