Preparing for a layoff isn’t anything anyone wants to do, but with unemployment just under 10 percent, the Federal Reserve taking steps to devalue our currency by up to 20 percent, and greater numbers of businesses outsourcing jobs to cheaper foreign alternatives, making preparations for a layoff is important for even the most secure jobholder. Even with the proliferation of severance lawyers and unemployment attorneys, layoffs have been numerous over the past few years.
If you get the sense that layoffs are coming to you or to your department, be prepared to brush up on your negotiation skills, particularly as they relate to negotiating a severance package. It’s always best to work your severance package out beforehand, but you have very little to lose by preparing for negotiations ahead of time. And don’t fall for the “layoff insurance” scams that are out there since most of them are just gimmicks.
10 steps to take to prepare for a layoff
1. Review your health insurance
Make sure you understand what your health insurance plan covers, and calculate how much it costs to continue your employer’s group insurance coverage through the COBRA. Be aware that under this coverage, you pay both the employer and employee shares of the premiums but at least you can continue the same coverage.
2. Beef up your emergency fund
It is CRITICAL that you set aside enough money in an emergency fund to cover your basic living expenses for three to six months … possibly as many as eight to twelve. These are your basic living expenses only – housing, food, basic insurance, transportation. Consider stashing this money in an online savings account or a money market account.