How to Protect Yourself from Unemployment
Being a middle-aged worker comes with perks, such as proficiency in your career and robust compensation. Unfortunately, it might also come with a greater likelihood of being let go.
First, the facts
According to a study by ProPublica and the Urban Institute, more than half of older U.S. workers are pushed out of longtime jobs before they choose to retire. “Layoffs can be devastating,” says Nichole Bridges, a certified professional coach and founder of Nichole M. Bridges Coaching. “The loss of income, combined with the emotional effects of being let go, can derail your ability to find another position and affect your personal relationships. Starting over after 40 can be especially challenging, because you are either earning more than your peers applying for the same job or appear over-qualified compared to them.”
While there’s no surefire way to “layoff proof” your job, there are certain steps you can take to ensure that if something does happen to your job, you’ll be better prepared to handle it financially, as well as more able to jump back into the job market, if that’s what you decide to do.
1. Build saving into your financial priorities
We’ve all heard the advice, but it's worth repeating — keeping an emergency savings account available to pull funds from at a moment’s notice can be a lifesaver during a layoff. If it helps motivate you to save, Ash Exantus, author of Mind Right, Money Right and director of financial education with BankMobile, recommends calling your emergency account something like your ‘Financial Freedom Fund,’ and putting 10-30% of every paycheck into it, with the hopes of eventually saving six to eight months’ worth of expenses. “Keeping it in a separate account ensures you won’t dip into it unless you really need it,” he says.
2. Make a plan to eliminate your debt
Building a better financial plan for a future that could include a layoff should start with eliminating outstanding debts. “Take a look at the bigger picture of your finances and make small changes that will get you on the right track,” says Exantus. After all, you don’t want to have to worry about paying down additional debts in the event of a job loss or a recession. To help funnel as much extra money as you can towards debt, Exantus recommends assessing where you are spending your money each month and cutting back on expenses you don’t really need (remember, want does not equal need).
3. Grow your network strategically
Staying up to date on your LinkedIn profile is helpful, but a better idea is to keep in touch personally with key people in your network, says Bridges. “You can collect thousands of names on LinkedIn, but if you don’t interact with them, you won’t see a long-term benefit,” she says. In your efforts to create lasting professional networks, Bridges suggests being very selective. While networking events might help in certain fields — like sales — “most other professions won’t see a high return on investment from these events,” she says. She recommends focusing on connections with people who have been influential throughout your entire career. “They can help you get your foot in a door that may otherwise be closed,” she says.
4. Get a second job
Bringing in a little extra cash on the side as soon as possible is a great way to help you possibly achieve multiple goals, like paying down debt, building an emergency fund, and creating a (potentially temporary) back-up plan, should something happen to your current job. Consider becoming a coach in your chosen field. “If you have years of experience in your industry, look for consulting opportunities that can help benefit others and give you the chance to turn your skill set into another source of income,” he says.
5. Showcase your value
Again, there is no foolproof way to avoid a layoff, but making yourself as valuable as possible to your current employer is certainly a step in the right direction. “Keep educating yourself about your field,” says Exantus. “If you are experienced, you are likely making more money than those who are just starting out, so it’s important to stay on the cutting edge.” Bridges agrees that taking advanced education classes is a great way to stay relevant, especially if your company offers a tuition reimbursement program. Plus, “Staying on top of the latest advances in your field will help you be more marketable if you end up looking for another job.”