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Are there any layoff benefits?
Laid off versus fired versus furloughed versus quitting
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Are there any layoff benefits?
Laid off versus fired versus furloughed versus quitting
Losing your job is never welcome news. For most people, it's a traumatic and frightening experience.
Even if it's a mass layoff due to industry shifts or a recession — reasons that don’t reflect your performance — it’s still distressing. A sudden job loss can severely impact your physical and mental health, not to mention your financial well-being.
News of layoff is an emotional rollercoaster that can leave you with feelings of hopelessness and worry for the future of your life and career.
Getting laid off from work can also be a push in a different direction. It may be your sign to change careers (regardless of your age), follow your passion, or find a better work-life balance.
In this guide, we’ll talk about what it really means to be laid off, how to recover from the emotional blow, and how to get back up on your own two feet.
Getting laid off means that your employer is terminating your contract. Layoffs are usually the last resort for employers and are caused by issues beyond your and the company’s control. They generally happen when a company's finances can't keep up with the cost of employees.
The source of the layoff can be an internal business problem like overhiring resulting in redundancy in staffing — when too many people are performing the same job — or annual profits that don’t align with the projections.
They can also result from external factors like a national recession or global challenges to the supply chain. During the height of the COVID-19 pandemic, the 12 largest American companies laid off nearly 100,000 employees.
Whatever the source of the problem, when a company lacks the necessary finances to keep up with costs, it begins restructuring the business by downsizing expenses and eliminating staff.
The pandemic has shown that layoffs aren’t the only option, with companies finding creative ways to keep employees onboard and cut costs in other places.
While losing your job isn’t something to celebrate, companies may offer your severance benefits when they terminate your contract. Here are a few benefits that you might be eligible to receive:
Many hiring managers might have highlighted their severance packages during the interview process. Offering severance pay recognizes an employee's work while serving the practical purpose of making a company attractive to potential employees by laying out what to expect with your health insurance, 401(k), and other employment benefits.
It’s also a way to avoid lawsuits down the road since most employees must sign a release agreeing not to pursue additional compensation or seek legal action against the company as part of the separation agreement.
You can always negotiate your severance package. You don't have to sign a severance agreement immediately, so take your time to carefully review the conditions and compare them to industry standards and severance packages being offered to other employees.
Here are some unemployment benefits to consider in your severance agreement:
If you work for a large corporation or multinational, it's likely that your employer has an outplacement program and can recommend you find a new job with potential employers at other companies. Reach out to your manager and human resources to ask for help contacting future employers and provide you with a letter of recommendation.
In some cases, losing your job might be temporary. During the pandemic, about 1/4 of unemployed workers were temporarily layoffs.
In this case, ask your employer to define a specific length of time you'd be out of work. Based on their answer, evaluate your finances and desire to return to the company. You can always choose to terminate your employment permanently and find another job.
Laid-off workers who are terminated through no fault of their own can apply for unemployment insurance programs through the U.S. Department of Labor. Unemployment insurance is a federal program that provides cash benefits to eligible laid-off employees, with benefits decided by the state.
If you’re laid off, the first thing that you should do is apply for unemployment insurance with your state's Department of Labor, as it can take various weeks for the first benefit check to arrive. On average, unemployment benefits are provided for up to 26 weeks for former employees, but coverage varies widely from state to state.
You probably have questions about the different types of job terminations. Is it better to quit or be fired? What is a furlough? Here are the differences between the different types of job terminations:
If you’ve been laid off, you’re probably going through a roller coaster of emotions. It's okay — you're not alone in feeling down.
The financial strain and feeling of loss of control that comes with an unexpected job termination have been linked to decreases in mental and physical well-being. Laid-off workers are likely to deal with depression or poor physical health.
Giving yourself time and space to process your job termination is essential to clear your mind and move forward.
Here are a few tips for coping with an unexpected layoff:
Your head is probably in a million places at once, but the first thing you should do after being laid off is apply for government unemployment insurance. Depending on your state, unemployment benefits may take a few weeks to kick in. It's essential to act quickly to make the adjustment more manageable and give you the peace of mind of an income while you evaluate your next steps.
It's essential to critically examine your current financial situation to decide whether it is appropriate to re-budget your lifestyle. To begin, take a look at your savings and emergency fund, unemployment benefits, and severance pay. Compare those funds to your expenses, separating necessary expenses like healthcare, housing, transport, and food, from non-essential costs.
Once you’ve examined your savings and monthly costs, determine if you need to limit non-essential expenses while you embark on a new job search. Your financial wellness may take a hit if you’re living on an unrealistic budget.
Give yourself time and space to process this new fork in the road. It’s common for workers that are unexpectedly terminated to struggle with their mental health. This is a critical time to lean into yourself and validate your feelings and grief.
Here are a few ways to stay on top of your mental well-being:
A job termination is never exciting news, but a sudden shift could push you to move into a new direction in your career path. You may have already felt like you needed a change but were too comfortable in your old job position. Take some time to imagine where you'd like to go from here. Talk it out with friends and family, consult a therapist, or write down your ideas in a journal.
Here are some questions you can ask yourself:
Our office and co-workers can sometimes feel like a home away from home. Work provides a critical social outlet, so it's important to stay connected if that’s lost. Volunteering or participating in community activities is an excellent way to tap into a new social circle. Here are a few to consider:
All this new spare time might make you feel stressed or anxious, but extra free time is an excellent opportunity to learn something new.
Throughout your professional career, you’ll need to upskill your existing abilities or reskill by learning entirely new ones. Temporary unemployment is a great time to prepare yourself with new or revitalized skills for a new job search. Consider what skills you can improve to make you a better professional candidate, like brushing up on a coding language or earning a new certification.
If you want immediate employment, finding a new job is your new job.
Start by updating your Linkedin profile, resume, and other professional social media channels to have everything ready when a job opportunity pops up.
Many jobs are placed through referrals, either internally or through recruiters. Compile a list of people in your professional circle to help connect you with potential employers. Send a polite and short email asking if they know of any job opportunities matching your experience.
If you cannot find a new job through direct contacts, networking events or your local, state, or national industry association are great resources for job seekers to help connect you to the right people and the right job.
Although a job termination is difficult, it doesn't mean it's the end of your career. It means a new opportunity is your next step.
During this time, it's essential to take care of your mental and physical well-being and understand that feeling down is a natural reaction.
By tapping into this guide, you have the tools to transition into the next stage of your career. Give yourself the space and time to evaluate your current situation, understand your future goals, and prepare for the next steps down your career path.
Foster creativity and continuous learning with guidance from our certified Coaches.
Foster creativity and continuous learning with guidance from our certified Coaches.
Elizabeth Perry is a Coach Community Manager at BetterUp. She uses strategic engagement strategies to cultivate a learning community across a global network of Coaches through in-person and virtual experiences, technology-enabled platforms, and strategic coaching industry partnerships.
With over 3 years of coaching experience and a certification in transformative leadership and life coaching from Sofia University, Elizabeth leverages transpersonal psychology expertise to help coaches and clients gain awareness of their behavioral and thought patterns, discover their purpose and passions, and elevate their potential. She is a lifelong student of psychology, personal growth, and human potential as well as an ICF-certified ACC transpersonal life and leadership Coach.
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