Career Backup Plans - Part One - Page 1

Oct 3, 2007

George Spafford

It can be a very unsettling situation to have a job and know that you’re at risk of being let go. The resulting stress can affect your health, family life and so on in very negative ways. While IT people need to have backup plans for systems drilled into them, the purpose of this article is to help you develop a backup plan for yourself.

Plan – Don’t Jump . First, don’t get so frustrated with your current job that you just quit. You have a job with money coming in so use the time, however much or little it is, to plan your next career steps and still have an income. Part of the frustration and stress comes from not having control. By planning in advance the stress levels become more manageable.

Talk to Your Significant Other. If you have a significant other, the next most important advice I can give you is to talk to him or her and develop your plan together. Discuss the situation, possible solutions, next steps, risks you are willing to take and the various elements set forth in this article. Don’t hide the truth and lash out at them due to the stress. They are with you in this incident.

To be Discrete or Not? Some people worry about whether to be discrete or not. “What if my employer finds out?” At this point you need to weigh the ramifications. What are the ramifications if they do? Might you loose some portion, or all, of an exit package? Might they fire you on the spot? These are all examples of scenarios you must consider and decide what risks are acceptable.

Finances . When weighing options, you should take finances into account. Given your current savings, how long can you go before you run out of money? What if you use near-liquid assets such as investments or your 401K plan? Consider the tax implications of using tax deferred investment funds such as the 401(k). Yes, you may get immediate funds but there could be a large tax liability.

At the same time you are looking at how to substitute income also look at how to reduce expenses. Identify what you spend first and write it all down. Then identify what items are discretionary and not. For example, a mortgage payment is pretty important. Spending on video rentals can be reduced if need be.

Understanding how long you have funds for can help you determine the type of position you go after, how long you can assess options and/or when you must decide by. For example, if you have funds for three months of living without income from your job, then should you spend two months soliciting and assessing offers before you accept one?

Severance . If there is a reorganization effort concerning you, some employers will pay exit packages to employees they let go. It may be two weeks, two months, etc. It may include insurance coverage and even employment counseling during that time. Not all employers do this and the levels will vary firm to firm and even between organizational levels.

The main point is to decide if this will be offered to you and then if waiting for this makes sense or not given your situation. If you get frustrated and leave early then you are walking away from money.

Insurance . An important consideration these days is medical insurance. Look at your options. A young healthy single person will be less concerned about this than say a middle-aged person with a spouse and children to worry about. Options include:

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