Laid Off? What To Do Before Plunging Into The Job Search


[Editor's note:  If you recently lost your job, take a look at Wise Bread's collection of tips and resources for the recently laid off.]

Your company has announced a soon-to-come layoff or you’ve been escorted out of the door. What’s next? What should you do…before updating your résumé, tapping into your professional network, and looking for a job? (Those of you who are considering career changes may also find this guide useful).

Review your financial status, especially now that it is changing.

Calculate how much money you’ll need to meet your obligations and how many months you’ll have before your personal financial situation moves from good to bearable to desperate.

Evaluate your severance package and consider your options, which may involve a lump-sum payment or salary continuation. (See New York Life’s What Do I Need to Know About Severance Packages? and's article on the Severance Package.)

If you are offered consideration (aka extra cash or some other benefit) for signing a non-compete agreement, think about the implications for locating a new job. (For example, I know someone who lost his job following a company downturn but couldn’t leverage his industry expertise because of a non-compete agreement; he didn’t have a college degree and was unable to relocate because of child custody issues, adding to the job-search and financial distress). If you signed a non-compete upon your hire or for consideration after being hired, see if you can get a clear definition of what companies or industries are considered competitors, or if the agreement is enforceable in your state. 

Look at your benefits package: your life, health, and disability insurance coverage as well as your retirement plans.

When will your benefits end? Do you need to replace your insurance coverage?

If you are eligible for COBRA (Consolidated Omnibus Budget Reconciliation Act), do you know its monthly cost? (more on COBRA and rights associated with HIPAA). Davis Liu, M.D., author of Stay Healthy, Live Longer, Spend Wisely mentions as a resource for investigating short-term and/or high deductible health insurance. (Disclosure: I received this book in exchange for a book review; more info to follow in a separate post).

Analyze your 401(k) plan options and obligations. Do you have a loan associated with the 401(k) and will you need to pay that off immediately? Should you leave the 401(k) with your employer’s administrator while you decide where to transfer the funds? Do you need to transfer the assets immediately upon your separation from the company? (See 401(k) Help Center)

Learn the rules of unemployment insurance. See if and when you are eligible for benefits (you should be eligible unless you were terminated for cause) and what the requirements are to receive payments. If you have been displaced as a result of increase in imports or offshore business, look into Trade Adjustment Assistance: here are some details about the Trade Act.

Set your professional and personal priorities. Will you live in the same town or will you relocate? Are you looking for a similar job in the same industry? Do you want to take a step forward and advance in responsibility or do you want to move laterally, or take a step back in order to spend more time with your family or developing a business idea?

Investigate a new career (if that’s what you want) and determine the time and resources it might take.

You might decide to become a nurse and you already know, for example, that an RN license may take 2 years to earn. But do you know when you’d actually be able to start classes? Do you know if you’d be accepted immediately into a program or will it take a several months?

Or, you’ve thought you might work as a teacher by getting credentials through an abbreviated training program (less than the traditional 4 years it usually takes to earn an education degree). Do you qualify? (I know someone who found several weeks into his discussions with an administrator that his GPA from his bachelor’s degree—earned over 20 years prior—was too low to enter the program).

Get a handle on the nuances and the time frame for earning credentials and landing a job.

Check or (or do your independent research) to see if your professional goals, personal desires, and financial needs are synchronized with your expected compensation. Decide whether you’ll relocate, sell the house, stay in your industry, or take an interim job while you go back to school.

Why pause before making the job-search plunge? If you take a breath and do some financial assessments, you’ll be more focused and more likely to get what you really want. 

Note that many topics I’ve mentioned may be governed by state laws such as the enforceability of non-compete agreements, pre-existing condition exemptions for health insurance, and availability of specialized teacher-training programs so talk to an expert in your area.

Disclaimer: The links and mentions on this site may be affiliate links. But they do not affect the actual opinions and recommendations of the authors.

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Guest's picture

This is a really helpful post, especially at a time like this. You offer constructive ways to make the most of the situation and move onto something better.

Guest's picture

Good post. Your first point is important. Review your financial status. I would add, that if you are in your fifties, you should consider retirement. Think Retirement

If you find yourself unemployed in a recession, it may take a while before you find a job, all the while burning through your retirement nest egg. And, at the same time, your house values and investments may decline. You may be better off, simply retiring, instead of looking for another job.

Guest's picture

I believe many stock options expire if you are no longer employed with the company. So that is another thing to consider.

Guest's picture

What ever you do, don't give up on yourself. A couple of close friends recently were downsized and they took it very personally. I keep trying to tell them things happen for a reason and nows the chance to get a better job. One of them did find a better job, but the other one is just mooping around, blaming the world!

Julie Rains's picture

Thanks for comments and additional mentions. And, Ben, I didn't think about covering the emotional toll of layoffs -- at least not explicitly though you are kind to mention that. There are so many issues to handle that I think it is good to start defining exactly what the problems are before beginning to search. My hope was that a job-seeker may feel more focused, empowered, and confident if he/she has a better handle on the financial implications, which might translate into an easier and more fruitful job search.

Guest's picture

thanks for the great resource.

Guest's picture

Great post Julie. By the way, is a great resource for real-time, every-employer-participates, salary information in my state - Washington. Perhaps other states have similar sites run by state-gathered data. It's a terrific resource for figuring out what to do next also. Know you like analyzing things? There are 371 jobs with analyzing as a key component. Who knew?!

Before you leave your job (assuming there's a transition period), do everything you can to connect with each person with whom you have a connection. It doesn't matter how random - maybe it's the guy you always parked next to, maybe your buddy who always ate Indian food with you, or the cute receptionist - but especially your co-workers, your subordinates and your boss. Let them know you'll miss them, be sure to get their phone number and email address, add them to connect on LinkedIn right away.

Then, stay in touch! People that like and respect you want to have lunch or coffee with you. They want to know how your kids are and whether you've broken par yet. If you decide to go a different direction with your career, let them know. They might have a sister/cousin/neighbor/former co-worker in that industry. Get a new resume? Email it to everyone who likes you and/or whom you respect. Say something cute if it suits you, like, “Here’s my shiny new resume, in case you forgot how wonderful I am.” Whatever - just get it out there so people don’t have to remember all your skills and talents when they’re chatting up their Uncle Hal. They’ll remember you’re an analyst and if Hal is interested, they can forward your resume to him.

Then, get out of the house! Go to industry meetings, attend training seminars, and go to job fairs. Let people who may know someone who needs you get to know you enough to where you become a three-dimensional human being, not just a piece of paper (resume) applying for a job. Work at really getting to know a couple people at each place you go to on a more than just professional basis. People remember people they care about, or those that inspire, amuse or teach them. In addition, attending these events cements the idea that you're really committed to the industry, even if it's a brand new one for you. You'll learn something, have a cookie and be able to put the industry membership or new skill on your resume.

Remember that in every interaction, you're demonstrating how you'll be as a co-worker, boss or subordinate. Will you be natural, insightful and fun? That's whom I'd want to work with! I went to a recruiting industry meeting a couple of weeks ago and folks from Getty were there speaking. They shared a statistic that I've known to be true from my corporate recruiting days - 60% of the folks they hired last year for open positions were referred by someone at Getty or someone who knew someone at Getty. It's who you know. Does that sound bad? It shouldn't. Consider that I trust our mutual contact not to steer you my way if you're obnoxious, careless or otherwise unsuitable. Right there you're more "valuable" than the pieces of paper on my desk. They could be complete whack jobs, but you're golden if someone refers you.

So dry your tears and get out there!

Guest's picture

dry those eyes princess...

Guest's picture
Jeremy H.

A started using a new website called PersonaVita that allows me create a professional portfolio of all my past projects I worked on. You can send a quick summary page for your co-worked to validate your project. Then when the time comes to apply for the new job you have a reason to be hired - validated work experience.

Guest's picture

Recently we got the second TV and I'd like to buy a DVD-VCR combo for it. Which one is better to buy to make the dvd part region free and how to do that? Can anyone help?

Guest's picture

Recently we got the second TV and I'd like to buy a DVD-VCR combo for it. Which one is better to buy to make the dvd part region free and how to do that? Can anyone help?

Guest's picture

Now is a good time to pursue educational goals as well.

I just lost my job, as did my department. Luckily I'm single with no kids and no mortgage, just out of college. Some of my colleagues are in completely different situations.

I've heard a lot of them discussing going back to school, they've been putting it off for awhile due to work schedules and family obligations, now they may have some time.

It's worth looking into. I posted on another job loss site earlier about looking for online certificate programs at either Villanova or SanFran. The Villanova one is for project management which I may pursue first, since it's more versatile now that I have no idea where I'm going next...

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