Tips to surviving retrenchment
With the cost of living increasing and the economic climate becoming a tougher one, companies are sometimes forced to downscale. In the process, entire departments are often retrenched. Being retrenched shows one that becoming addicted to a salary is dangerous. But, by knowing your options and reducing your risk, you can reinforce your ability to cope when the rains come down, adds Jesse Green, country manager of Adzuna.
While retrenchment is hardly anticipated, there are a number of things to do, according to Green, if you are retrenched to guard against financial ruin:
- Keep job alerts running all the time
The first piece of advice follows the recipe of “prevention is better than cure”. Use a job aggregator website like Adzuna or Indeed to search the entire job market for your skill set and create an alert that constantly updates you of new opportunities. “Even if you are happy in your job, it doesn’t hurt to know what’s out there and how the job market is doing. Even going on interviews once or twice a year is healthy for your career – you don’t know what’s out there until you look, and your current job may not actually be as good as it sounds,” Green states.
- Make sure your CV is seen by humans
“Nowadays, most companies and recruitment firms use software to trim down the applications they receive before they go through them, using applicant tracking systems called ATSs. By editing and checking your CV, you can get seen and thus interviewed more than others,” Green adds.
- Keep a side income going
More people than ever now have side projects and second incomes, this is not because they all have income-generating hobbies. People are actively exploring other ways to maintain their work-life balance. Many an entrepreneur has started out after being retrenched, this could be an option for you too.
Other tips to surviving retrenchment include:
- Live within your means
“Hand in hand with eliminating debt comes living within your means. Enjoying and funding a lavish lifestyle is all too easy and all too tempting. Our culture encourages high-end consumption habits and the credit to pay for this is too readily available. Trying to keep up with the Joneses is one of the most common and costly mistakes you can make. The choice between spending on nice-to-haves now and saving for need-to-haves later is one which should not be taken as lightly as we do,” says Danie Venter, a Citadel advisory partner.
To this end, consider buying second hand as it can save you a significant amount over the course of your life and this is particularly true when it comes to costly, depreciating assets such as cars, adds Venter.
“If you do buy new, be it anything from cars or couches, consider not just the affordability of the monthly instalments, but the interest rates charged over the period of the loan as well. It is important that you know and are comfortable with exactly what you are paying in total, as well as the opportunity cost that comes with it (i.e. the lost opportunity to otherwise reduce debt or earn returns off those funds),” notes Venter.
- Pay your future self-first
We all know that we should start saving for retirement from our first pay cheque, but not many of us do. The cost of not doing so is remarkably high and it is something that you can never recoup from.
“While such priorities as saving for a down payment, paying off student debt and saving for your child’s education are all good goals, the price to be paid should not be deferring saving for your retirement. Consider your short, medium and long term financial goals and put together a savings plan to achieve them. This can be as simple or as complex as you see fit. Even just defining your broad goals and monitoring your progress against this benchmark can be very helpful,” Venter adds.
- Find a financial advisor
Financial advice is not just reserved for the rich, but something everyone should take advantage of.
“Even if you feel you do not have a substantial amount to invest, the right advice can save you a significant sum in helping you to avoid costly mistakes. Just as a general practitioner cares for your physical health, so a financial advisor takes care of your financial well-being: assessing financial fitness, diagnosing problems, prescribing appropriate corrective action and advising on wellness. Find a suitably qualified advisor who you can trust and who can construct a holistic financial plan to meet your unique goals,” highlights Venter.
Retrenchment is never an easy process to undergo and could have quite an impact on both your and your family’s financial wellbeing, but if you work smart and well with your money the blow may not be as bad.