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12 Action Steps to Take When You Lose Your Job

Updated on June 29, 2017
FlourishAnyway profile image

FlourishAnyway is an Industrial/Organizational Psychologist with applied experience in corporate human resources and consulting.

Out of a Job so Now What?

Losing a job hurts both financially and emotionally.  Take these 12 action steps to get yourself back on the payroll.
Losing a job hurts both financially and emotionally. Take these 12 action steps to get yourself back on the payroll. | Source

What to Do When You Lose Your Job

You’re suddenly out of a job due to downsizing, facility closure, or job termination. Feeling confused, sad, and angry, you grieve the loss of not only an income but also social connections. What now?

As you try to process next steps, here are a dozen action items that will help you survive this career hiccup. They are arranged in three "buckets" of items, all designed to keep you moving forward:

  • keep the money coming in
  • prepare for the future and
  • take care of yourself.

You can do this!

Reader Poll

What's the most difficult part of losing a job?

See results

Keep the Money Coming In

Because your bills won't pay themselves, it's important to put an immediate priority on keeping the money coming in.  That's true even if you have a significant severance payout.
Because your bills won't pay themselves, it's important to put an immediate priority on keeping the money coming in. That's true even if you have a significant severance payout. | Source

The Bills Won't Pay Themselves

First things first: your priority is to keep an income stream flowing. There are those who depend on you (even if it’s just you and your dog.) The bills won't pay themselves.

If you have any of the following situations, you unfortunately may not give finances the front-and-center focus it deserves:

  • a severance agreement
  • sizeable savings, or
  • another income you can currently rely on (e.g., spouse).

However, you may be unemployed longer than you think. Failing to prioritize finances is therefore a huge mistake, as severance and savings will disappear more quickly than you realize. HR professionals recommend that for each $10,000 in pay, you should allow yourself at least one month to find a new job (e.,g., 6 months for a $60,000 job). Allow more time, however, when

  • economic conditions are tight
  • you have significant relocation restrictions
  • you’re over 50
  • are highly educated
  • have niche or outdated skills or
  • have occupied the same job for more than 10 years.

Don't Skip Applying for Unemployment Benefits!

Too many people simply assume that they are ineligible for unemployment.  However, unemployment benefits are NOT need-based.  Unemployment insurance is a social welfare program funded by employer taxes. Benefits are available to any eligible worker.
Too many people simply assume that they are ineligible for unemployment. However, unemployment benefits are NOT need-based. Unemployment insurance is a social welfare program funded by employer taxes. Benefits are available to any eligible worker. | Source

A Note on Severance Release Agreements

If you left with a severance package, finances may not feel like an immediate burden. However, those severance release agreements can be a double-edged sword.

All too frequently, they lull people into inaction, believing they have plenty of money and time to replace that lost job. Additionally, severance release agreements can also bind ex-employees legally by stipulating, for example, that you

  • release your employer from any legal causes of action, such as complaints of discrimination, wrongful discharge, and unpaid wages
  • can never work for the company or its subsidiaries again—even if it should merge with another organization and
  • agree not to speak negatively about your employer (even if it’s true).

If you left your job with a severance agreement, I hope you hired an employment attorney to review the document before signing it.

Action Item 1: File for Unemployment

Unemployment compensation is awarded to eligible workers who lose their jobs through no fault of their own. This is a type of social welfare program that is funded by employer-paid taxes. Apply for unemployment benefits immediately. Typically, there is a one-week waiting period, meaning that for the first week of unemployment, benefits will not be paid.

Unemployment is NOT a need-based program. Instead, benefits are awarded to anyone who meets eligibility criteria. Benefits are based on prior earned wages. The eligibility criteria, formula for determining unemployment wages, and the number of weeks of unemployment benefits you may be eligible for can all vary by state.

To make a claim, register with the state agency that handles unemployment insurance. Often you can do this on-line. It could be called the Workforce Commission, Employment Commission, the Unemployment Insurance Agency, the Employment Development Department, Division of Employment Security, etc. Note that if you live in a different state than where you worked, you'll need to file with the state where you worked.

Also during this step you must determine whether you need an attorney for any wrongful discharge claims. Why? Because any statements you make during the unemployment process can compromise later complaints.

It's astonishing how many people who have lost their jobs skip this fundamental step. It doesn't even occur to them that they are probably eligible. They may assume the payout is so meager and difficult to obtain that it's not worth applying. Or, the fact that it's a social welfare program embarrasses them.

Stop thinking like that. I've known people who had made six-figure incomes and also received a generous severance payout yet they qualified and successfully collected unemployment . (Who do you think encouraged them to apply?) There's no shame in that.

If you don't have a personal budget, now is the time to get one and stick to it.
If you don't have a personal budget, now is the time to get one and stick to it. | Source

Action Item 2: Work on a Personal Budget

If you don't have a personal budget, now is the time to get one. If you already have one, then rework it to

  • eliminate all unnecceary spending
  • reduce fixed expenses by looking at money-saving alternatives (e.g., alternative cell phone plans)
  • slash variable expenses through more frugal living (e.g., fuel, groceries) and
  • prioritize debt payments (i.e., living expenses like mortgage or rent, secured expenses like auto loans, then credit cards)

Your objective is to reduce outgoing expenditures.

Know precisely where your finances stand by obtaining a free copy of your credit report from annualcreditreport.com, (or call 1-877-322-8228). Do not rely on credit cards as an ATM or a backup plan for when your severance runs out.

Also, keep paying more than the minimum on them if possible so that your debt doesn't balloon. However, if your credit card debt looks like it will be unmanageable, contact your credit card companies' hardship department before missing a payment. Tell them that you have lost your job and want negotiate a solution (e.g., debt forgiveness, skip a payment).

Looking for a job is your full-time job, but having a side gig such as doing handyman work can give you unreported income.  It will also keep you active and connected.
Looking for a job is your full-time job, but having a side gig such as doing handyman work can give you unreported income. It will also keep you active and connected. | Source

Action Item 3: Get a Side Gig

You’re still grieving your job loss, but this is no time to crawl into a dark hole of inaction. If you have unemployment benefits, pay from a part-time job will typically reduce your benefits.

However, there are a variety of simple sources for generating side (ahem, unreported) income: babysitting, house sitting, walking dogs, eldercare, handyman/handywoman services, lawn care, running errands for seniors, selling unwanted items, offering services on Fiverr, etc.

In addition to gaining some spending money, you’ll see the benefits of continuing to stay active. Make sure that everyone you have contact with knows you’re looking for a job. You never know what type of connections people have!

Prepare for the Next Chapter (And the Chapter After That)

Prepare for the next chapter in your career by reviewing your personal brand, social media presence, and resume.
Prepare for the next chapter in your career by reviewing your personal brand, social media presence, and resume. | Source

Set Yourself up for Success

While trying to make ends meet now, you’ll also need to prepare for the future—the next chapter in your career and beyond. You’ll need to set yourself up for a successful job search while also ensuring that your retirement savings aren’t depleted by this temporary career hiccup.

Action Item 4: Consider What to Do with That Retirement Plan

If you had a retirement plan with the job you lost, decide what to do with it. Options typically include:

  • leaving it where it is
  • rolling it over into an IRA
  • waiting to get a new job, then rolling it over into your new employer’s plan or
  • cashing it out.

Too many people make the mistake of cashing out the retirement savings that they worked years to accrue.

But be warned: Raiding your retirement will cost you big. That early withdrawal will be taxed as ordinary income, and you’ll incur a 10% tax penalty (although there are a few exceptions). In addition, creditors can now have access to that money in the event that you file bankruptcy, whereas retirement money is untouchable. Most importantly, you’ll have to start all over again in saving for your retirement.

If you don’t know what to do, don't make an emotional decision. It’s better to leave it where it is while you research your options.

Get Ready for the Job Market

Do you have your "elevator speech" ready?
Do you have your "elevator speech" ready? | Source

Action Item 5: Assess Your Personal Brand

Crystalize what differentiates you from your competition in the career marketplace by asking yourself the following questions. Make sure to document your answers:

  • What special knowledge, skills, abilities, or other attributes do I offer? (These formulate the foundation of the unique value proposition you can provide a potential employer.)
  • What are my key career accomplishments?
  • What three or four adjectives describe me best as an employee?
  • What do I still want to achieve?

Now condense this down to an "elevator speech," a memorable and persuasive, 30-second explanation of who you are, what you offer, and what you're looking for. Use this elevator speech repeatedly in your networking.

Source

Action Item 6: Update Social Media Accounts and Blogs

If you're not updating your social media accounts—or worse, if you don't have an online presence yet—then you're making the task of job hunting all that more difficult on yourself.

Determine which social media accounts you need and which ones you don't. Then pick a small, manageable number (e.g., Facebook, LinkedIn, Twitter, Google+) and vigilantly ensure that you are

  • current
  • connected, and
  • career-appropriate.

In addition, review any blogs or other on-line content that you have generated. Compare your personal brand with publicly available information about you by Googling yourself. Also see if your data is available on Spokeo, a secondary data aggregatory.

Delete old accounts and posts that you wouldn't want a potential employer to see. Areas of concern typically include

  • photos of drinking or drug use
  • sexually revealing photos or posts
  • discriminatory remarks based on race, religion, gender, etc.
  • complaining about your previous employer, co-workers, or customers and
  • negatively commenting on prospective employers.

Then set up a free Google Alert for any future mentions of your name on the Internet. You want to be the one who controls your narrative.

Although you need to periodically review your privacy filters, treat the Internet as if nothing you post is sacred. That's because privacy settings can change with limited notice. (Anyone with a Facebook account understands that.)

It's not enough to eliminate the negative. You also need to use social networking to enhance your job search. Work on creating strong social profiles and posts that highlight your personal brand. Share your expertise and build a strong network of connections that can boost your visibility to potential employers.

Reach out to former co-workers, mentors, and professional contacts to let them know you're in the job market.  Call, e-mail, do lunch, and connect on social media.
Reach out to former co-workers, mentors, and professional contacts to let them know you're in the job market. Call, e-mail, do lunch, and connect on social media. | Source

Action Item 7: Reach out to Colleagues and Industry Contacts

No matter how you are feeling, this is not the time to be shy. Get out there and connect with former coworkers, mentors, and other professional contacts in your industry. Also continue to stay active in professional organizations. If you were part of a mass layoff, don't forget to maintain contact with others who are job searching, as they may come across an opportunity that is perfect for you and vice versa.

Pick up the phone, do lunch, email, and connect online, using those cleaned up social profiles and your polished elevator speech. Ask trusted contacts if they would serve as references when the time comes. Finally, your focus should always be future-oriented when you talk with contacts rather than lamenting the circumstances of what happened. Skip the trash-talking of your old employer or boss.

Action Item 8: Retool Your Resume

Dust off that resume! Update its format to reflect what employers expect to see now. For example, replace your snail mail address with your LinkedIn profile, personal website, or other key social accounts that you want employers to know.

Make sure your resume's format is simple enough that an applicant tracking system (ATS) can scan it. You want it to see human eyes, don't you? Additionally, give it a refresh by overhauling your work history and skills so that your wording is tight, action-oriented, and devoid of outdated skills and technology.

Practice Makes (Almost) Perfect

You haven't interviewed in years, so do some "trial run" interviews for jobs you don't want.  There's nothing like experience to boost your confidence.
You haven't interviewed in years, so do some "trial run" interviews for jobs you don't want. There's nothing like experience to boost your confidence. | Source

Action Item 9: Interview for Jobs You Don't Want for Practice

Like any other skill, interviewing requires practice. The more exposure you have to different interviewing questions, styles, and settings, the more relaxed you'll be when the job you really want comes along. Besides, you never know what could happen. You might be pleasantly surprised.

Take Care of You

Sure, being jobless hurts. But try being sick and unemployed. Research your health insurance options and make the choice that is right for you and your family.
Sure, being jobless hurts. But try being sick and unemployed. Research your health insurance options and make the choice that is right for you and your family. | Source

Action Item 10: Check on Health Insurance Options

Medical expenses are the number one reason for personal bankruptcy. Another cause is job loss. A recent Harvard study debunked the myth that most people who claimed bankruptcy are the uninsured when it found that that about two-thirds actually had some kind of health insurance.

However, you're likely one accident or illness away from financial ruin. Sure, being jobless hurts. But try being sick and unemployed. Research your health insurance options and make the choice that is right for you and your family. Here are some places to start:

  • Spouse's insurance program
  • Medicaid
  • COBRA - under this federal law, you can continue your employer-provided health insurance at your own expense for a short-term period, an expensive option
  • Obamacare
  • CHIP (Children's Health Insurance Program) - state-administered programs that provide free or low-cost health care for children (and in some cases pregnant women)
  • Private health insurance

Action Item 11: Stick to a Schedule

Getting a job IS your job now. Don’t give in to the temptation to sleep until noon. Instead, stick to a schedule so that you remain productive and goal-oriented, and use the time to productively propel yourself forward. That includes

  • researching your career field
  • updating/upgrading your skills
  • networking in a purposeful way on social media, in person, through email, on the phone and in person
  • practicing interviewing skills, etc.

To keep yourself honest, make a plan and track your progress.

Soon You'll Be Back on Track

Look for free and low-cost ways to restore your energy, self-confidence, and enthusiasm so that when you find that job you'll be refreshed and ready.
Look for free and low-cost ways to restore your energy, self-confidence, and enthusiasm so that when you find that job you'll be refreshed and ready. | Source

Action Item 12: Attend to Your Physical and Emotional Well-Being

Don't forget to take care of yourself emotionally and physically. Exercise, eat healthy, and de-clutter your life to bring a greater sense of order and control to it.

Look for free and low-cost ways to restore your energy, self-confidence, and enthusiasm so that when you find that job you'll be refreshed and ready. Regard this period of unemployment as a temporary setback. With any luck, you'll soon be back on track!

© 2017 FlourishAnyway

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    • FlourishAnyway profile image
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      FlourishAnyway 5 weeks ago from USA

      Sha - It's so good to hear from you. I'm glad you landed in a good place. Indeed or SimplyHired are the two resources I'd recommend. I'd always keep my resume updated and posted because you never can tell when a better opportunity will come along. I call it "option development." You can always say "no" if you're happy in your current position. Thanks for stopping by and giving us an update on yourself!

    • bravewarrior profile image

      Shauna L Bowling 5 weeks ago from Central Florida

      Great advice, Flourish! I found myself back on the job market after trying to make it as a freelance writer. It had been three years since I'd worked in the world. I was confident my overall years in accounting would serve me well, which it did. However, the fact that I'd been out of the workforce for three years and I was 58 at the time, could have been potential stumbling blocks for me. Fortunately, I found a job within three months of actively looking. A great resource for job seekers (and employers) is Indeed.com. You can post your resume and sign up for alerts meeting your criteria. In fact, it was that invaluable tool that landed me the position I'm in now. I never took my resume down after I'd been hired back in 2015. After a year, I discovered I really hated the ethics of the company I went to work for. Fortunately for me, the company I just started with a couple of months ago found my resume on Indeed and reached out to me. Am I ever glad! Better company, better benefits, better environment, better pay and much closer to home!

    • FlourishAnyway profile image
      Author

      FlourishAnyway 2 months ago from USA

      Diana - Trust is so important, and when you take security away that trust disappears as well. Thanks for your comment. I hope you are doing well.

    • teaches12345 profile image

      Dianna Mendez 2 months ago

      Good pointers on how to bounce back after a job loss. I found your poll selections all very much a part of how one feels but I believe another aspect is the feeling of mistrust. When one loses security from job loss it is like losing a good relationship.

    • FlourishAnyway profile image
      Author

      FlourishAnyway 2 months ago from USA

      Chriswillman90 - Best of luck on finding a new position. The economy is picking up so it should be easier than a few years ago.

    • Chriswillman90 profile image

      Krzysztof Willman 2 months ago from Parlin, New Jersey

      Fantastic as I'm sort of going through a transition phase currently and these 12 tips are extremely helpful.

    • FlourishAnyway profile image
      Author

      FlourishAnyway 3 months ago from USA

      Linda - thanks so much for your support. I hope it helps people who need it the most.

    • AliciaC profile image

      Linda Crampton 3 months ago from British Columbia, Canada

      Your article contains great advice, Flourish. This is an excellent reference source for someone who has lost their job.

    • FlourishAnyway profile image
      Author

      FlourishAnyway 3 months ago from USA

      Tamara - I appreciate you kind endorsement. Have a fabulous week ahead, wherever you are!

    • profile image

      Tamara Moore 3 months ago

      Thank you for sharing this! In this economy, we need your post as it is very informative and an essential guide for us all. Thank you for taking the time to write this as a reference that we can come back to, time and time, again.

    • FlourishAnyway profile image
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      FlourishAnyway 3 months ago from USA

      Thank you, Devika. Have a wonderful weekend!

    • DDE profile image

      Devika Primić 3 months ago from Dubrovnik, Croatia

      Losing a job is not a good feeling. It makes one to lose their self-esteem and to feel less positive. Your steps are helpful to anyone in this situation.

    • FlourishAnyway profile image
      Author

      FlourishAnyway 3 months ago from USA

      MsDora - Absolutely. The Internet can pop back up when you least expect it. There are so many examples of people who have lost out on jobs and never knew why. Have a wonderful weekend!

    • FlourishAnyway profile image
      Author

      FlourishAnyway 3 months ago from USA

      Linda - Thank you for the kind words of support. Just about anyone can find themselves in this unfortunate situation, so I hope it helps those who need it. Have a fabulous Fourth!

    • FlourishAnyway profile image
      Author

      FlourishAnyway 3 months ago from USA

      Heidi - Career crises can be real opportunities to reinvent oneself if one can just see past the immediate emotions. Oftentimes, people process it like a gut punch, however. I'm glad that you were able to navigate the rough waters. It's sad that your friend wasn't quite so agile. Have a wonderful weekend yourself.

    • FlourishAnyway profile image
      Author

      FlourishAnyway 3 months ago from USA

      Liz - It's amazing what people don't know about Obamacare. I'm sorry about your husband and your financial situation. Thank you for stopping by.

    • MsDora profile image

      Dora Isaac Weithers 3 months ago from The Caribbean

      Super-good advice, and can be a professional guide for the unemployed while job-searching! Glad you mention paying attention to Internet posts that could haunt the job-seeker. You have all the areas covered.

    • Carb Diva profile image

      Linda Lum 3 months ago from Washington State, USA

      All very good pointers, presented in a positive, uplifting way (of course, that's who you are!). Thankfully I am happily retired and no longer have to worry about the job market. But I know this will be useful for many people. I hope it goes viral.

    • DzyMsLizzy profile image

      Liz Elias 3 months ago from Oakley, CA

      Excellent points for those in the search process. I'm retired, so it's no longer an issue for me, thankfully. Though all our savings went 'poof' when hubby got sick, and before his disability was finally granted. So, despite planning, we still live hand-to-mouth. :(

      You might want to add in to the bit on health insurance, that "Obamacare" and ACA (the Affordable Care Act) are one and the same thing. It's rather shocking how many people don't know that!

    • heidithorne profile image

      Heidi Thorne 3 months ago from Chicago Area

      Had a friend who went through this. After being employed for many years, she thought it would be quick and easy to get another similar job. But the world had changed dramatically during her tenure and opportunities were not the same. Then there was the insurance issue. Shows why you should always be on the lookout for your next job or business opportunity.

      When I was asked to leave a job many, many years ago, it did turn out to be a godsend. So I think we often invest too much in the loss and not in the new horizons that this departure creates.

      Thanks, as always, for sharing your HR wisdom with us! Have a great July 4th weekend!

    • FlourishAnyway profile image
      Author

      FlourishAnyway 3 months ago from USA

      Sally - The Internet is forever. Thank you for reading!

    • sallybea profile image

      Sally Gulbrandsen 3 months ago from Norfolk

      Very useful, positive, informative and well-written article. The info about updating social media accounts is especially important. People don't realise sometimes how their behaviour online can affect their chances of getting a new job:)

    • FlourishAnyway profile image
      Author

      FlourishAnyway 3 months ago from USA

      Bill - That's a great combination! Thanks for sharing your experience, my friend.

    • billybuc profile image

      Bill Holland 3 months ago from Olympia, WA

      Been there, done that, great points. I lost my job in 2002...the one advantage I had was a ton of varied experience and a great background...that and a refusal to give up. :)