At my previous job, I was employed for a while on a series of annual contracts that were renewed each May. The money that funded those contracts came from a series of research grants, as most of my job was oriented around helping process, organize, and distribute enormous piles of data.
This meant that for a period each year, it wasn’t entirely clear whether or not I would continue to be employed at the end of each contract. I had stellar performance reviews and I knew that if the project continued, my own job would continue. Still, that didn’t change the fact that I was never sure about things until the funding actually came in.
At that time, I had a lot of faith – easily too much faith – that my contract would be renewed, so I didn’t prepare for the sizable chance that the contracts would not be renewed. Looking back, it was actually a pretty big risk.
This leads to an obvious question: assuming that I knew that my job was ending in a few months – or had a good chance of ending – what should I have done financially and professionally to prepare myself? What steps should I have taken so that the loss of that job was just a minor bump in the road and not a major personal crisis?
Here are the nine main steps I would take if I saw a job loss looming down the road. Some of these work best if you see a job loss coming several months in advance, while others are really useful close to the time of the job loss.
1. Build and Maintain an Emergency Fund
The single most useful thing you can have in a job loss situation is cash in the bank. There is nothing else that will help with your day-to-day living more than that emergency cash supply.
If you don’t have any, start now. Start right this second. The easiest way to do this is to instruct your bank to transfer a small amount of cash automatically into a savings account from your checking account each week. Ideally, you’re doing this from one bank (where your checking is held) to another (where your savings are held) so that you do not have the easy ability to tap those funds via your ATM card in a moment of weakness.
Do not rely on a credit card for your emergency fund. Credit card issuers will happily cut your credit if they no longer view you as a reliable person to lend money to. Even worse, identity theft can zap your access to credit when you least expect it. Cash is king – stick with it when it comes to your true moments of trial.
2. Build and Maintain a Solid Professional Network
The easiest way to get back on track with your career path is to move into another job in your career path. The best way to get your foot in the door with another job in your career path is to have some solid relationships with people in your career path that you can ask for help when that moment comes.
You need to build a strong collection of professional relationships. This isn’t really even an option. You need people you can contact when you need help in your career.
Most importantly, cultivate strong individual relationships with lots of people in your field by directly helping them when they need help. If someone is struggling with a professional challenge and you can offer something truly useful, do it. Don’t ask anything in return, either. If someone with talent in your career path is looking for work, help them find it. Don’t ask anything in return, either.
Eventually, you’ll have plenty of professional capital, and when the chips are down for you professionally, don’t hesitate to cash in that capital and ask for help. That kind of help can be a career changer.
3. Build and Maintain a Solid Resume
Keep your resume updated at all times. Never, ever let it slack off, even if you feel very secure in your job.
Include major projects you’ve completed, skills that you’ve honed in the workplace, education that you’ve completed, certifications you’ve earned, and anything else that might be of interest to an employer. I generally encourage people to have one single page that functions as a “home run” resume, along with a longer document spelling out more information.
Keep this updated. I encourage people to update this document at least once a month. Schedule a monthly appointment in your calendar to update your resume.
4. Distribute Your Resume Far and Wide
Part of keeping your resume updated is making sure that others can access it as needed. It’s a good idea to not only keep your own copy, but also keep it updated on lots of different online resources, including Career Builder, Dice, Indeed, Monster, and especially LinkedIn. Yes, this means whenever you update your resume in one place, such as your personal copy, you should update it on all of those other sites as well.
Why distribute it? Different employers look in different places for employees. You want your resume to be in as many different places as possible so that you have maximum chances of being discovered when someone is trying to find someone to hire.
Not only does this help in situations where a job loss is imminent, it also helps in terms of general career advancement. Sometimes, people will find your resume on an internet site and end up connecting you to a job much better than the one you currently have, even if you’re not actively looking. That alone makes distributing your resume well worth your time.
5. Start Applying for Jobs as Soon as Possible
As soon as you feel uncertain of your professional standing at all, start applying for jobs. Get started early, because the longer you have, the more likely you are to find another position. Don’t worry about upsetting your current position, either, because if you’re on tenuous contractual ground, your employer will understand your need to seek employment.
Don’t restrain yourself only to jobs near where you live, particularly if you’re renting. If you have a chance to get a great stable job, go for it!
6. Hit Your Professional Network for Job Leads
If you followed the earlier step and have built up a solid network, don’t be afraid to tap it if the end of your contract is getting close.
You don’t have to reveal that you’re facing unemployment. Simply ask some of the members of your professional network whether they know of any professional opportunities that might be a good fit for you.
I’ve found it best to contact professional friends individually when doing this. I went through a period in 2004 where I did some limited job searching and I found that direct emails and other contacts was the best method for contacting people without making the news completely public that I was looking for work. Most professional people act with discretion when this happens.
7. Build Up a Side Gig with Non-Interfering Hours
This is good advice regardless of whether or not you’re facing the end of employment. Not only does a “side gig” provide you with an additional income stream, it can turn a period of joblessness into a period where you can make that side gig far more robust while also still earning a bit of income.
What do I mean by a “side gig”? I simply mean that you have some other active method in your life for converting time and effort into money, preferably one with flexible hours. Usually, this takes the form of a small side business.
Examples of side gigs include small crafting businesses (think Etsy), home computer repair, lawn care businesses, Youtube channels, website development, and e-book writing. I have personally dabbled in basically all of these, either directly or by advising others. All of them have resulted in lasting income streams. All of them have income streams that grow when more time and energy is invested, but most of them continue to earn a little bit even if time and energy isn’t being invested at the moment.
Many side gigs, especially ones that earn a steady (but usually small) income even if you’re not actively investing time and energy into them, require a lot of time and effort to get started. Thus, it’s often a good idea to use your spare time when you’re employed to launch this side gig and get the ball rolling so that you can have a bit of income when your job goes away and you can use your additional time to kick this side gig into overdrive.
8. Know How to Take Advantage of Unemployment Insurance
If you think that you may be eligible for unemployment insurance, take the time to figure out the details before you become unemployed. You can find out all the details through the Department of Labor’s website, including information about who to contact if you’re unsure about your eligibility.
Having a firm grasp on what you may or may not be eligible for regarding unemployment benefits can help you make much smarter decisions about what to do at the end of your contract. You may view a period of unemployment with unemployment insurance as a period to really launch your side gig, or maybe it’s simply a tool to take some of the pressure off of needing immediate re-employment.
In either case, know your benefits and know whether you’re eligible.
9. Know How to Defer Your Student Loans
If you are still actively paying student loans and enter a period of unemployment, it is very likely that you can defer your student loan payments for the time that you’re unemployed. You’ll want to contact your student loan providers so that you understand their deferment policy (so that you can make better decisions).
Naturally, you’ll want to set up deferment as soon as you’re certain of unemployment. The sooner you get your deferment filed, the less time you’ll have to spend facing down student loan payments without a steady income.
As with unemployment insurance, know what you can do as soon as possible, then take advantage of it as soon as the unemployment situation arises.
An upcoming period of unemployment can be scary, but it does give you a window of opportunity to prepare for it before you lose your steady pay. Take advantage of that extra time. The more steps you take now before your job disappears, the easier it will be to come through the other side successfully.