Looking at newspaper photos today of Lehman’s employees carrying their belongings out in boxes brought back memories today.
I was made redundant after September 11th. I was working for a new company trying to do business with airlines which, after the attacks, didn’t materialise. They axed half the workforce, which was a big shock. I’d never been given the push before. It was a small company and the thought that our bosses had been sitting in a room deciding whose names would go on the list was unpleasant. I felt humiliated clearing my desk that day and worried about how I would pay my bills.
But I was lucky. Our company wasn’t bust and I got a small redundancy payment though I’d only worked there nine months. Plus I didn’t have a mortgage or children to support. However, I’d just moved into my friend’s flat and she worried I couldn’t afford the rent. Her mother suggested she kicked me out, but fortunately she didn’t.
I wanted to save my redundancy money, so I tried to live cheaply. I learned to cook. And there were other positive aspects, despite how glum I felt initially. Eventually I found a more rewarding career.
Many people out there are currently concerned about redundancy or worse. But armed with that knowledge, you can plan ahead. Here are some ideas:
1. Start saving now. If you’re on a tight budget it’s tough, but if you can start squirreling away money each month into a bank account with a decent interest rate – preferably instant access. Experts say you need three months’ salary put away, which might not be practical. But do the best you can. Get a bonus? Put it in the bank. If there’s any overtime or extra work available then take it on and save the proceeds.
2. Scrutinise your budget. See if you can cut down your spending to save cash and prepare for meagre times. Do you really need to eat out every week or run a costly mobile? Check direct debits in case you are still paying for services you no longer receive.
3. Consider redundancy insurance. Research your options. Personally I think you’re better off putting money away because some of these policies only pay out if you lose your job and don’t work at all. But if you’d feel more comfortable, then root out the best policy you can find and read the small print.
4. Know your rights. Check your redundancy entitlements. If yours is a large company these may be on the staff intranet or dig out your contract. If you’ve worked there many years it may be substantial. The statutory requirement is one week’s pay for every whole year worked to a 12 week maximum. 18-21 year olds get half a week’s pay for each full year of service, 22-40 year olds get one week’s pay and over 40s get one and a half week’s pay, to a maximum of £330 a week. But your company may be more generous. If more than 20 workers are shed legally the company has to negotiate with the unions. If you don’t belong to one, consider joining.
5. Remember freelancers, temporary staff and the self-employed aren’t eligible for redundancy pay.
6. Keep your CV updated. You never know what’s around the corner, whether job losses or a fantastic new job, so keep your CV ready to send out. Some companies provide training for redundant workers or help finding work. Don’t be too proud as it may prove useful.
7. Don’t be rash. If you lose your job, try to keep your cool. You may be dying to tell your boss where to stick his executive toy, but you’ll need a reference from him (make sure you get it before you leave) and you don’t want to jeopardise your financial package. Bite your lip and do your complaining at home. I burst into tears when it happened to me, but I took pains not to be rude to anybody and they did help me get work.
8. Don’t get depressed. It’s hardly your fault if the company faces tough times. Don’t beat yourself up – it’s an opportunity to do something new with your life. If you’re feeling down, find somebody sympathetic – maybe a friend in a similar boat – to talk to.
9. Be upfront with new employers. Don’t fib. Be honest and explain what happened, but don’t dwell on it or complain about your previous employers. Say you’re looking forward to a fresh challenge. Careers advice from the government.
10. Get your entitlements. If you can’t immediately find a new job, then if you’ve paid sufficient class 1 National Insurance contributions you’re entitled to the Jobseeker’s Allowance (£46.85 a week for those aged 18-24 and £59.15 for those aged 25 plus). But if you received a redundancy payment you can’t claim it until the notice period your payment covers has ended. Payments vary so check out the Jobcentre website for more information. You may be able to claim housing benefit and council tax benefit. Talk to your mortgage provider if you’re having difficulty with payments. You may be able to take a payment holiday.
11. What if your employer goes bust? Sadly you probably won’t receive any redundancy, and you might not even get your wages. The TUC website says you will, however, be one of the company’s ‘preferred creditors’ – meaning if money becomes available then you’ll be one of the first creditors paid. You may be able to claim from a National Insurance fund setup to cover your redundancy payment etc. Contact the BERR (former DTI) for more information. Take advice from a union if you can.
Worried about redundancy? Got any tips for coping with losing a job? Leave a message and let me know.