I hope you and your career are doing great! But today, we’re going to talk about what to do if you decide to leave your job–or you get laid off.
What you do or don’t do after leaving your job is critical for protecting your income, benefits, and professional relationships. Laura covers steps for successfully managing a voluntary or involuntary job change.
Money Girl is hosted by Laura Adams. A transcript is available at Simplecast.
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Welcome back to Money Girl! My name is Laura Adams. If you’re new here, I’m an award-winning personal finance author who’s been writing and hosting this show since 2008.
My mission is to help you get the knowledge and motivation to prioritize your finances, build wealth, and have more security and less stress. When I’m not podcasting, I work with brands as their on-camera spokesperson, PR consultant, and multimedia content creator. If you want to learn more about my books, money courses, or how to work with me, visit my personal website, LauraDAdams.com.
I hope you and your career are doing great! But today, we’re going to talk about what to do if you decide to leave your job–or you get laid off.
Before we get started, if you’re enjoying Money Girl, please subscribe and give it a five-star rating or review so we know if you're getting value from this free content!
Recently, there have been some layoffs at well-known companies. If you’ve ever been laid off or terminated from a job, you know how upsetting and disorienting it can be. Understandably, you might feel blindsided and not think clearly.
I remember getting fired from one of my first jobs with a small company after it lost its largest customer, leaving it much less profitable. While it wasn’t my fault that the company needed to shed expenses and people quickly, I remember feeling terrible and unsure about what to do next.
So, even if your career or job situation is stable, it’s essential to be prepared for the unexpected and avoid costly mistakes if the worst happens. In addition to dealing with layoffs, this show will also cover critical steps if you decide to leave a job, so stay with me to learn more about this important topic!
Here are nine next steps you should take after getting fired, laid off, or deciding to leave your job.
If you get terminated for any reason, the company has likely been doing a lot of legal preparation behind the scenes and may ask you to sign certain documents the same day. Never sign anything when you get caught by surprise or are unclear about what’s happening. Instead, ask how much time you have to review the paperwork.
Take time to carefully review termination documents when you’re calm or have advice from a trusted professional, such as a lawyer or accountant. Note that the rules for firing an employee vary by state. If you believe you’ve been wrongfully terminated, you should immediately speak with a labor and employment attorney for guidance.
You can often negotiate factors, such as severance pay, unused vacation pay, and benefits. So my advice is to always ask for more than you get offered during a termination. Put your requests in writing and submit them to your company before signing deadlines.
If you voluntarily leave your job, it's always best to secure another opportunity before you resign. Giving two weeks' notice is a minimum expectation that you should discuss with your direct manager first. But there's a chance that you could get asked to leave right away—so be prepared for that possibility.
If you get terminated for any reason outside of your control, such as changes in economic conditions, mergers, or restructuring, ask for documentation that explains the specific circumstances. Carefully review a layoff or termination letter for accuracy, and don’t hesitate to ask for any errors or omissions to be corrected.
You might ask for a termination notice to include significant contributions you or your team made to the company. That could help prospective employers understand that you weren’t fired but were a valuable employee who got included in a labor reduction.
Before you leave an employer voluntarily or due to a layoff, ask for written recommendations from your direct manager, human resources department, and co-workers. That will give you a leg up as you start looking for your next job.
No matter why you part ways, stay positive and bring as much class to the situation as possible. Remember that moving on is just a part of being a professional, and every job adds to your experience and network. So do your best never to burn any professional bridges—you never know when you might work with the same folks again or need them to refer you.
Depending on your company and layoff circumstances, you may get offered a severance package, such as a month or two of pay, unused vacation, and sick time. However, there's usually room to negotiate, especially if you suspect the package is below industry standards or you get help from an experienced labor attorney.
If you ask for extra severance compensation and the company won't agree, request other benefits instead. For instance, they might be more willing to cover your health insurance for additional months or write multiple letters of recommendation.
If you receive a final paycheck the same day you get laid off, double-check that it's accurate and includes any unused paid time off you're entitled to. However, for most large layoffs, you might not receive a final check for a couple of months as the company processes a volume of administrative work.
When you voluntarily leave a job, you may have some room to negotiate your exit compensation based on how much the company needs you. For instance, if your company can't easily replace you, they might pay extra for you to create documentation about your role, remain employed until you train a replacement, or work part-time over a transition period.
If you get one or more lump sum severance payments, do your homework to find the best place to keep it, such as high-interest savings. That will allow your money to earn more than regular savings and remain safe and liquid for when you may need to spend it.
After you get laid off or voluntarily leave a job, your benefits, such as health, life, and disability insurance, typically end on the last day of the same month. For instance, if you get terminated on the 5th of the month, you likely have coverage through the 30th or 31st.
Unless you work for a small business, you're typically eligible for COBRA continuation coverage for up to 18 months. It allows you to continue the same medical, dental, and vision insurance you have. However, you're usually required to pay the entire premium, which could be much higher than what you paid as an employee because the employer paid a portion for you.
If you get a new job quickly, paying for COBRA monthly to bridge a coverage gap might make sense. However, if you don't know what your next career move will be and want to save money, shopping for health and dental plans at Healthcare.gov can be the most affordable option. You may qualify for a substantial premium subsidy based on your expected annual income and family size.
Remember that going without health insurance for any period is risky. A quick trip to the emergency room for a broken bone or illness could leave you with a massive bill. So make replacing your workplace health plan a top priority after you get laid off or voluntarily leave a job.
You may also need to replace other policies, such as life insurance, which ends at the end of the month you leave a company. It's easy to compare life insurance quotes using a comparison site like Finder or Policygenius.
If you have a 401(k) or a 403(b) with a former employer, you have multiple options that aren't time-sensitive, so you can wait to make retirement decisions. The same is true with a health savings account (HSA), which is yours to keep and spend even if you don't elect to purchase a high-deductible health plan.
However, if you have a flexible spending account (FSA) balance, you must use (or lose) your funds as quickly as possible. Unless you qualify for a grace period or pay for COBRA coverage, employer-paid FSA funds typically go back to an old employer.
If the reason you get laid off or fired is not due to "cause," such as poor performance or violating company rules, you can apply for unemployment benefits. They replace a portion of your income while you look for your next job.
How much unemployment assistance you receive, for how long, and what requirements (such as attending career training or applying for a certain number of jobs per week) vary by state. So check your state's Department of Labor website for more details and instructions on how to apply.
Even if you think you'll find another job quickly, filing for and receiving unemployment benefits can take time, so applying right away is worthwhile in case your job search takes longer than expected.
Most states allow laid-off workers to collect unemployment benefits for up to 26 weeks. However, in some cases, if you receive severance payments, you may not qualify for unemployment until they stop.
Note that if you voluntarily leave a job, you're never eligible for unemployment payments. Their purpose is to support workers who unexpectedly lose their jobs and income.
While getting laid off may not be what you wanted, it could be the catalyst for starting a new career or your own business. So, before jumping to the fastest job opportunity possible, reflect on your emotions and what you genuinely want from your work and personal life.
Taking a career pause could be the perfect time to relocate, start a family, go back to school, or get training in a promising new industry. For example, you could do freelance work related to your old job, take online real estate classes, or get an advanced degree in your same field.
If you make the most of a layoff or termination, you might see it as the best thing that happened or a springboard to a better career and future.
If you don't regularly update your resume, now's the time to polish it based on the job you want next. If you're unsure where to start, consider hiring a career coach or professional resume writer to help put your best foot forward.
It's OK to show you're unemployed and briefly explain why you got terminated in a resume. For instance, you might say, "I was laid off due to corporate downsizing or a 10% staff reduction." If your resume highlights your best skills, ambitions, and accomplishments, recruiters won't turn you down just for getting laid off.
If you get asked about a termination during a job interview, don't avoid it or give a vague answer. Be prepared with a brief, honest response about why your previous employer needed to lay off workers due to competition, acquisitions, the economy, or whatever occurred.
It's essential to put a positive spin on your termination. For example, suppose you get asked why you left your previous employer. You might say that you were part of a 15% staff reduction but now are looking forward to finding an opportunity that allows you to work more closely with customers than in your prior role. Or anything that shows you have a good attitude and are excited about moving forward.
Once you have an updated resume, use it to create job search profiles on various sites like LinkedIn, Indeed, Monster, and Glassdoor. They automatically match your skills and experience with job openings on their platforms. And you can create helpful alerts for specific opportunities, such as those in a particular pay range, industry, company, or city.
Most job recruiters use LinkedIn to find candidates, so refresh your profile and change the settings to show that you're looking for work. The more descriptive your resume and career profiles are, the more likely you can get discovered by prospective employers.
In addition to updating your resume and creating job profiles on career sites, let your professional contacts and friends know you're looking for an opportunity. Reach out to your closest connections by phone or video call to ask for their advice or to get together in person.
While networking can feel awkward, think about it as reconnecting with colleagues and friends you care about. Find out what's happening in their lives and careers first, and then let them know you got laid off but are excited about finding a new opportunity. No one will judge you for having been terminated if you don't dwell on it or have a negative attitude about your previous employer.
As always, you can leave a comment or money question by calling 302-364-0308 to leave a voice message. Or send an email using my contact page at LauraDAdams.com.
That's all for now. I'll talk to you next week. Until then, here's to living a richer life.