Preparing for Today’s Employment Realities

Like most people, I have been reading the constant stream of stories regarding chronic unemployment and underemployment. Although fresh graduates and people over age 50 seem to be hit the hardest, unfortunately, the labor dynamics of today mean that lifetime employment with one company is a thing of the past for most people.  Most of us will contend with layoffs, furloughs, periods of contract employment and freelancing many times in our careers. With this new labor market in mind, here are some ways to strengthen your financial situation:

–If you are employed, keep your eyes and ears open for fresh opportunities — this means keeping your resume fresh, continuing to learn about your industry and other areas, and interviewing both inside and outside of your firm.  Remember to be discreet with much of this as your current boss will likely be unhappy that you are looking around.  Even if you are satisfied with your current job, think of this as a plan B backup.

–Continue to upgrade your skillset – continue to learn new skills including computer skills (maintaining a website is great), both formal and informal.  If you are in an industry that likes certification tests, challenge yourself by getting certifications you don’t need. For example, I became a Chartered Financial Analyst many years ago which has been useful in establishing some common ground with other financial professionals.  I also learned some material outside of my core area in preparation for the three annual tests.   If certifications are not your thing, performing volunteer work with a non-profit, school or church is a great way to learn a new skill.  You may wish to explore alternative income as well to see if you can augment your paycheck with other sources.

–Create a two-tier budget to take into account irregular income – if you have a portion or all of your income on a freelance and irregular basis, it probably makes sense to have a very bare bones budget and then items you wish to spend on if the funds are available in an overflow budget.  When I was freelancing, I had some issue with unpaid receivables (clients who paid late, if at all), thus the conservative option is to manage on a cash received rather than accrued basis.

–Keep the emergency fund well-stocked — the back of the envelope metric of having 6 months of liquid savings is likely to be out of date given the tougher employment market.  Better to boost this by a couple of months, if possible.

–Network like crazy — one of the most important assets that each person has is their network: colleagues, former colleagues, classmates, neighbors, etc… Even though the internet and other tools are useful, I am always reminded of how many new hires and referrals come from someone you know or someone they know.  Continue to build and cultivate contacts, and if you are in a position to help someone obtain a job, be proactive in doing so.

shared at this week’s Carnival of Personal Finance