The experience of a job loss comes with a lot of trauma and financial stress. You might lose your current job, not because of your competency, but because there are some circumstances that companies go through that will leave them no other choice than to downsize its workforce.
Currently, millions of people around the world have lost their jobs and source of income due to the COVID-19 pandemic. The current rate of unemployment in the UK, as released by the Office for National Statistics (ONS) is steady at 3.9%, and the number of workers on the UK payrolls reduced by more than 600,000 between March and May 2020.
People were advised to stay at home as part of the government's policy to curb the spread of coronavirus. Since then, about 2.8 million people, which includes the unemployed and low-income workers, have claimed the Universal credit in May 2020. The impact of the lockdown measures has also seen the government's job retention scheme granting furlough to more than nine million workers, which is around 22% of the working-age population in the UK.
A total of about 7.6 million jobs are at risk across all sectors in the UK, as shown by both furloughed employees and job cuts. The retail and wholesale sector is estimated to experience the largest number of job cuts, with about 1.7 million jobs at risk caused by the temporary closures of stores in non-food retail. The accommodation and food services industry is likely to also be affected by job loss, with about 1.2 million low-income workers at risk. Arts and entertainment, manufacturing, construction, transportation and airlines are also highly vulnerable to job cuts.
While some sectors will experience massive job cuts, some sectors could fare better, as reflected by the capacity to work from home. Sectors such as social workers, call workers, pharmaceuticals, transport and logistics, and farmers were predicted to see an increase in their workforce.
How to recognise stress or depression caused by job loss
Aside from the obvious financial distress that it can cause, the pain of losing a job can have a negative impact on your mood, relationships, and overall mental and emotional health. Often, our jobs influence the way we see ourselves and how others see us, which is more than just earning a living.
Even if you didn't love your job, the most upsetting truth is that nobody wants to lose their job because nobody wants to lose their salary. It likely gave you a purpose and meaning to your life. Finding yourself out of work suddenly can leave you feeling hurt, depressed, and angry.
Millions of people are facing job loss around the world. No matter the circumstances that surround your unemployment or job loss, don't feel it is your fault or feel like it is a time to be in isolation away from friends and families.
How to effectively overcome stress or depression caused by job loss
Speak out to your family, close friends, social network and professional services - don't suffer in silence
If your job is your only source of income, losing it can be quite overwhelming. Rather than keeping this to yourself in this critical condition, speak out to your family and close friends whom you trust. They will be willing to support you emotionally. It would be best to consider seeking the help of a personal finance coach or a debt counsellor to help you set a budget and cut down your spending. Remember, don't go through this alone; reach out to stay healthy and strong. A lot of people bounce back after a job loss, it may take a while, but it will not be forever!
Remember, your job does not define you
The crisis of identity makes people define themselves by what they do, what they wear, or where they live. One of the very few questions people ask when they meet someone new is, "what do you do for a living?" Remember, losing your job or being unemployed shouldn't define who you are. Making a "living" is different from making a "life." Therefore, be sure to separate the two and not carry any blame. There probably wasn’t anything you could do about it.
You are your biggest asset; so stay positive and work on the next phase of your life
The most valuable asset you have at the critical point of losing your job is your mindset. The loss of your job is not the end of life. What the future holds is much more important than the present. So, stay positive and work on the next phase of your life.
Job loss and personal finances
Be clear about where you stand financially
Not knowing your financial standing can cause more stress and worries, which would lead you to take desperate decisions. Be clear about how much money will be coming in through compensations or partner's income. Understand how much you have in savings and how long this will see you through - This will help to reduce your stress around finances, as you may have enough in your savings to see you through until you get another job.
Create a realistic budget
A review of your last six months to 1 year of expenses as a family will give you an average projection of your budget over the next six months to 1 year. This will help you to create a realistic budget for your expenditures and bill payments. Start by listing out all your expenses in order of priority and cut out the less important ones. There's no doubt that reducing your expenses might be difficult, but it will have you be in a more stable financial position.
Make use of your health insurance policy
If your job loss is related to health issues, contact your health insurance company and utilise any insurance policies you may have related to job loss as a result of poor health.
Job loss and redundancy
Understanding your rights and redundancy packages
Understand your rights to consultation during redundancy processes (use this link to research information on employer process). Your employer has to carry out certain legal procedures when undergoing redundancies. For example, you should be consulted and not singled out or treated unfairly. Seek legal advice if you believe you are not being treated fairly from the Citizen Advice Bureau.
Be clear about redundancy packages
Understand what your employer is offering you. Use the statutory redundancy calculator or create a redundancy plan to see how much you could be entitled to. Seek advise and ask questions from your employer, union representation and speak to colleagues to share knowledge and support each other. Find out what other options your employer has other than taking a redundancy package.
Understand your entitlement and take action quickly
Once you are informed about a possible job loss, start doing your research to find out whom you need to inform, such as job seekers allowance, universal credit, housing benefit, council tax, etc. Understanding which point you need to make contact and knowing what you are entitled to and understanding the process to make a claim is very important. You may lose out if you leave this too late.
Re-building your career after a job loss
Consider an opportunity to explore other career options
Although job loss can be a negative experience, it presents possible opportunities for a career change, starting a business, or taking a break from work. Upon learning about your job loss, consider weighing the pros and cons of your job loss. List out what the negatives and positives are and take time to evaluate what actions can be taken, how long the pros and cons will take to manifest, and what actions can be taken to minimise the effect or accelerate the positive impact. Many people go on to do greater and better things after a job loss. Some discover new careers, some start-up businesses, and others utilise this free time to explore other long-standing desires they have had.
Think short and long-term
Depending on your financial situation, you may need to think short-term initially. This means finding any job to do to keep up with bills. You will also need to think long term about where you want to be in the next 1, 3 to 5 years. Thinking long-term will help you decide what actions you need to take now to help you reach your next 1, 3, or 5 years goals. If you are considering changing careers, do you need to build your experience level to reach your desired salary scale? Do you need to take courses or gain qualifications for your desired role? Remember that many people are in the same position as you, so you may be competing with a lot of people. What do you need to do to stand out in your field and set yourself apart from others?
Volunteering yourself into a permanent position
As unrewarding as it may seem, volunteering is a great way to enter a field with little experience. If you play your cards right, you could be offered a role or have enough experience and networking to land yourself into a permanent position.
Before leaving, ask for feedback from your employer and colleagues
This may be something you have never done and may even be shy to do so, but the feedback you receive could help you greatly in updating your CV and preparation for job interviews. A lot of the time, we underestimate our performance and hearing how other people see you will also be a great boost to your confidence. Be sure to take on negative feedback as constructive and use it to develop your skills.
Here is a template of how to ask your colleagues for feedback:
Hi_____________, (Colleagues names, don’t send to All- personalise by including their name)
My development as a ___________(Your profession) is very important to me. Please can you take 5 mins to provide feedback on my performance, to help me to continue to develop in my role as a___________(Your profession)
Are you happy with the way I worked with you and the team?
What did you like about the way I worked?
Is there anything you would have liked I did differently or can improve upon?
Send them a thank you email, upon receipt.
Leverage and expand on your existing network
Why is networking the best way to find a job? 80% of jobs are offered through networking. Your existing network consists of your group of trustworthy and loyal colleagues, clients, associates, former and current bosses, and others who are willing to recommend you for your excellent skills and performance. These are the same people who will open doors and create exciting new opportunities that you wouldn't have access to ordinarily. Be sure to utilise your networks, stay in touch, offer updates on your job search, ask for support, be clear about how you want them to help you. Attending networking events is also a great way to expand your network. Due to COVID-19 and restrictions with large group events, you may want to consider searching for online career networking events.
Be creative about your job search
Let no one tell you there is one way to get a job. Although we mentioned that 80% of jobs are offered through networking and word of mouth, there are more than one avenues to finding a job nowadays. Lots of people find jobs on Linkedin, social media, events, etc.
Let’s round up
Finally, stay positive and be in control of the things you can control because your biggest asset is your mindset. Losing a job can be a challenging experience for anyone, but the good thing is that there is always a solution to every problem. Start by accepting it, speak out to your family and close friends; don't suffer in silence. Follow the effective tips above and make positive decisions that will enable you to cope with the situation and save you from financial stress.
Remember, losing your job is not losing a life. Rather, it can be a way to progress into something more significant.