Surviving a Downsizing

The key to surviving bad times is to always be prepared for the worst (or maybe the best!). In this article, we will give you some insider tips on how to know the signs of a pending layoff, and what to do when you see the writing on the wall.

How to smell a downsizing

There are a number of signs you may begin to notice that can be good indicators that big changes are headed your way. The first of these signals is when senior management becomes evasive and vague. Lack of clear communications on the direction of the company is the first signal of a storm coming. You may get the sense that they are not being completely open and honest with you. Try to notice if they are "walking the walk", not just "talking the talk". If there are significant changes being discussed, they will not want individual employees to find out until they are ready for everyone to find out. This is why they will behave in this elusive and ambiguous manner.

Another sign of a pending downsizing is when the finance department begins to have important meetings with the heads of HR and other key departments. They will be gathering data on headcounts and other employment cost factors. This time is typically when any unfilled positions will be eliminated and a hiring freeze will be put in place.

You may also begin to hear rumors about changes in senior management. With the advent of e-mail, rumors about these kinds of changes can spread through even the largest of global organizations within a few hours. It is sure to be a common topic of conversation in the break room. Pay close attention to what is being said. Try not to let the rumors upset you. Consider the source and find out how they heard the news.

Changes in leadership can frequently mean opportunities for advancement at various levels throughout an organization. There may also be rumors about your company being acquired or merged with another company/ division. Pay attention to these as well. Keeping an eye on the competition is always advisable. Having contacts in the competition always gives you a better survival edge (both for news and for potential jobs).

One final item to watch is industry trends. How did your employer do last year/ last quarter? What is going on at your competition? Did they have a good year, quarter, etc.? Are they laying off or hiring? What do industry analysts have to say about your company and its competition? Is your employer making investments at this time in new products and technologies, or is it holding the line on expenses? These are all very telling indicators of where your employer may be headed over the coming months.

Eighty percent of the time, employers will not be willing to directly tell its employees if a layoff is looming in the near future. However, they will be telling you if they are in growth/ expansion mode, as they will need your help to recruit your friends. Take note of the behavior of the recruiting department.

Assess your position

Regardless of how well your employer is doing financially, it is important to always consider your relative value to your employer. Can they do without you? Are you relatively high on the pay scale for your position? Review your last two performance appraisals to measure your risk in this area. Look first at your "value" to the organization. Who else knows how to do your job? If they terminated you tomorrow, is there someone else who could fill your shoes? If yes, you could become a target.

Also look at your salary relative to the pay scale for your position. Are you above or below the midpoint for your pay scale? If you are above the midpoint for your salary range you could also become a target for a layoff. Being above the midpoint simply means that you are more expensive than the market. It also most likely means you are more experienced in your position. This can work as well for you as against you.

When management considers how they will restructure a department, they will look at where they have excess capacity, and where the skills of the various employees overlap. The managers will then most likely be given a number of employees by which to reduce. For example, suppose you are on a team of three people, all of which do generally the same job. You are the highest paid, and have been there the longest. The other two employees are newer and make less than you do. Depending on the number of positions your manager needs to eliminate, he or she could choose to eliminate the two more junior people and assign their work to you. Your manager may also do the opposite - eliminate your position and assign your work to the newer team members.

Sometimes performance is a factor, but usually only if one of the team members is not performing up to par. For example, using the three-person team described above, let's assume that you and one other employee are meeting expectations and getting all of your work done on time. The third team member is struggling to keep up and generally not meeting expectations. In a case such as this, where only one person needs to be eliminated, the poor performer would become the target. Keep in mind that performance only comes into play when one of the employees in the target group is not doing his or her part.

Once you have reviewed your performance appraisals, take some time to talk to your boss about 1) your performance and 2) what is going on with the company. Make sure to solicit updated feedback from your boss. This action will tell him or her that you are interested. Ask your boss directly about his or her assessment of the company. Is he or she aware of any upcoming layoffs? Be flexible and let your boss know that you are willing to take on other responsibilities or to move to another city (if necessary and you are in fact willing to do so). Depending on the situation, you may consider a career shift or a transfer to a safer area or department. Gather as much data as you can and make an assessment of what will work for you under the upcoming circumstances.

Have a backup plan

Even if you talk to your boss with the best of intentions, there are no guarantees. The best plan is to actually have several plans at once, each one ready for execution. Here are a few ideas to keep in your back pocket for the moment when the right opportunity appears.
Pull out and dust off your resume. Get it updated and have it ready to send out on a moment's notice. You never know when you might meet someone who knows someone who could use a person with your skills. Along with the resume, get your "elevator speech" written and memorized. Your elevator speech is a 60 second blurb about yourself. Follow this approach:

Try not to be "schmoozy" or insincere with your elevator speech. People will pick up on the insincerity and lose interest immediately. Be genuine and confident.

Deploy your network. Remember all those contacts you made while working for that Politician Manager? Now is the time to get back in touch with those people. Make a list of everyone you know and get in touch with them. Let them know that you are looking for new career opportunities and you would appreciate any help or advice they could offer. DO NOT directly ask for a job. Just put the word out and see if they know anyone who might be able to help you. This is called networking.

Once you have your resume and your elevator speech ready, begin looking into other companies that you might like to work for, or which you believe may need your skills. Then find someone in your network of contacts who works there. Get them to introduce you to a key decision-maker who has the authority to hire people.

Finally, look into your personal finances. Job-hunting takes time and you may need to spend several months looking for work. Evaluate your savings, debt and your monthly expenditures. Think about what expenses you can give up if you have to. You may want to consider eliminating unnecessary expenditures immediately and put that money toward your savings. Maybe you should consider refinancing debt. In many cases, you may get some kind of severance package, so try to consider this in your calculations. However, you may only get a few weeks pay, so don't be overly optimistic. In recent years large and mid size corporations have been reducing their severance packages significantly, and we forecast that this trend will continue. Do not rely in the current severance policy, this can change constantly.

If you think you may have some time before your number is called, it may be a good time to take a look at what skills and competencies the company will be requiring in the coming months. If your employer offers tuition reimbursement or you can afford to get certified in a new skill that will make you more valuable to your employer, do it. Remember that the more you know, the harder it will be for the company to do without you.