Pink Slip Not the End of the World

When 1,900 employees of Jet Airways were sacked by the management, there was hue and cry in the electronic and print media. Some political muscle flexing and a demonstration later, the management succumbed to pressure and Jet Airways Chairman Naresh Goyal declared that he was reinstating all the employees. But after this high-voltage drama, what went unnoticed was that, in lieu of retrenchment, Jet Airways had declared a pay cut of 25 per cent for its senior management cadre employees. So it achieved what it set out to achieve in a less painful manner.

But employees of other organizations are not as lucky as that of Jet Airways. They have no other option but to fend for themselves after getting the boot and look out for new jobs. Lakhs of employees from both organized as well as unorganized sectors have been retrenched over the last two months and, if some are to be believed, the situation may get worse going forward. Alarmed by the situation, Prime Minister Manmohan Singh appealed to top corporate leaders (including Deepak Parekh, Mukesh Ambani, Sunil Mittal, Shashi Ruia, Anand Mahindra, among others) not to cut jobs due to economic slowdown. So one can expect some respite in retrenchments, at least in the organized sector.

With the economic slowdown in the US and European countries taking a toll on the developing economies such as India, most of the companies are beginning to feel the pinch in their business growth. The going is getting tougher and private companies are looking at cutting down on costs to meet the challenging situation. As a cost-cutting measure, most of the companies resort to cutting down on staff, thereby reducing their salary bill. The employees dread the pink slips because it can be a traumatic experience for them. Sudden loss of job not only throws the family’s finances out of gear, but it can also cause severe psychological impact on people who suddenly find themselves out of work. For most, the reality of being jobless is quite dreadful after having enjoyed the security of being salaried. Prolonged joblessness can entail drastic adjustment in the standard of living and spending habits, social life and finally, the psychological impact of being unemployed often leaves its scars on those retrenched. Hence, it is imperative that lay-offs should be the last option for the companies. There should be open and frank discussion between the employer and the employees to deal with the issue of cost-cutting.[PAGE BREAK]

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So how does one cope with such an unpleasant situation? Well, there are many ways to deal with it, both from employers’ as well as employees’ point of view. Employees in particular have to put in conscious efforts, both psycho-logical as well as financial, to adjust themselves with the situation of being unemployed. Supriya (name changed on request), an employee working with a retail merchandising firm, said, “We were told that our company was not doing well and the management had began the process of down-sizing in February this year. Most of the departments were closed. So we already knew and were mentally prepared for it. But somehow we kept thinking that we may not face the situation and did not look out for jobs vigorously. Then in August the second batch was retrenched and I was among the lot. We were given one month’s severance pay.”

Subhash (name changed on request), an employee who worked with Lehman Brothers went through the experience of losing job suddenly, said “We were in a state of shock. The sudden feeling of being out of job was like an earthquake. But the whole world knew about the collapse of Lehman Brothers and nothing could be done about it. I was out of work for 20-odd days and started looking out for a new job.”

Let’s see how to prepare oneself for the D-day and how to cope with the difficult situation after receiving the pink slip.

Pre-Pink Slip
You must believe in the motto ‘Perform or Perish’ at all times. Since no company would like to lose a star performer, your excellent performance will save you from getting the axe. And despite your good performance, if the company does tell you to leave, you should understand that it is being forced to do so due to unavoidable circumstances.

If your company has taken the trouble to give you skill mapping or re-training services, grab the opportunity and make the best use of it. Constantly upgrade your skills and stay on the cutting-edge. This will give you the extra edge to stay in your job.

Pay close attention to communication from your superiors because quite a lot can be picked up from the tone of the message. Keep yourself updated on the happenings in the company and its business. How is it doing in the market and what are its growth projections for the future? This will give you an idea about the shape of things to come.

Plan for the future and try to have an alternative ready. Be prepared to move on before the pink slip is issued. The companies too can lessen the blow by taking the employees into confidence. The company management should be open with employees about the problems and hardships being experienced. By doing this, the management can win the support of its employees, who may also pitch in to tide over the difficult times. It can also prepare the employees a few months ahead of the impending process and keep them informed about it. Sudden termination of services can cause psychological turmoil among the employees.[PAGE BREAK]

Post-Pink Slip
Psychological Battle
First and foremost, don’t let retrenchment kill your self-esteem and sense of worth. You have lost your job because the company is facing a challenging business environment and needs to cut down on costs to ride through the rough weather. You have not lost your job because your performance is unsatisfactory or because you are unfit for the job. You must always keep believing in yourself and your capabilities, think positive and get on with the task of looking for a new job with confidence. Remember, the new job you may get might be as good as or even better than the one you have lost. “People who have lost jobs tend to lose self-esteem and start thinking negatively about themselves.

They begin feeling like fish out of water,” explains Dr Sanjay Kumavat, President, Bombay Psychiatric Society. “Even the perspectives of their family members changes. The man without a job loses importance in the family and he soon finds that even his wife and children do not love and respect him,” avers Dr Kumavat.

Explaining the need to make a fresh beginning, Dr Kumavat says “Our mentality has to change. If a person does not get a job, he should think in terms of alternative sources of income. He can exploit his skills and talent by starting a small venture and generate a new source of income. He should explore opportunities depending on his background, skill-sets and areas of interest. For example, if a person is good at English, he can start English teaching classes at his home. He should not let his ego come in the way of making a new beginning.”

Subhash feels that the retrenched employee should not take a decision in haste and keep looking out for good opportunities. “You need to have patience and keep your morale high. Also, don’t go at a discount, that is, don’t settle for a lesser salary than you were drawing,” advises Satish.

The next step is to tell your family about the situation immediately. Loss of job is not something to be ashamed of and your family should not be kept in the dark. You must tell your family because you and your family will have to start cutting down on expenses immediately. This is especially important if you are the sole bread earner.

Financial Battle
First and foremost, take stock of all your liabilities and see which expenses you can cut down immediately. You can’t obviously cut down on food but you can do away with other non-essential expenses. Eating out and entertainment may have to be cut down drastically. If your savings are low, you will have to find a suitable job or an alternate source of income before you run out of cash. You may have to cut down on many of your requirements to maintain your standard of living. It may take good amount of time and effort to get a job of your choice and interest, and you will have to manage your expenses till then. Of course, if you have a family member to support you financially, your situation would be much better off. “It is important to save for the rainy day or else you are going to be in deep trouble,” opines Supriya. Concurring with view, Subhash says “We should not forget Indian values of thrift. We must inculcate the habit of saving and try to save 50-60 per cent of our earnings. Also, we must try to keep our liabilities to the minimum”.[PAGE BREAK]

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Take stock of all your financial assets to see if you can sell any of them to bring in cash. Will any of the fixed deposits, bonds or debentures that you invested in the past become due in the near future? Can you sell some of your shares to raise some immediate cash?

Stop using your credit card immediately. If you do want to use it, then use it sparingly and settle all the bills on or before due date. Don’t carry over credit card payments hoping to get a job in the near future, because if you don’t get one, you can land in a debt trap, making your financial condition worse.

Look at your various sources of income, such as interest or dividend income on your investments. Have you invested in any income scheme which assures you of a regular income? These minor sources of income can help you pay off all your bills?

Avoid getting into a situation where you have to make a distress sale of your assets such as house or car. Plan well ahead for such an eventuality. You can sell off your house and move into a rented accommodation. However, selling your house should be the last resort and should not be done in a hurry. A better option would be to move to a cheaper location and rent out the current home. If you don’t own a home and are currently staying in a rented accommodation, you should consider moving into a cheaper locality which could result in substantial savings in your rental expenses.

It is advisable to keep paying your housing loan instalments and insurance premiums. You may end up losing your home if you default in payment of your housing loan. If you stop paying your insurance premiums and fall sick, you will have to foot the medical bills yourself if your medical policy lapses on account of such default.

Don’t even think of taking a personal loan to make ends meet (in any case, you won’t get it if you don’t have a job). If you are desperate for cash, you could explore options like a loan from your public provident fund (PPF), provident fund or insurance policy. You could also mortgage your house to raise good amount of money to tide over the crisis.

Last, but not the least, the pink slip can turn out to be a blessing in disguise as it can give you the time for introspection and reflect on your strengths and weaknesses and come out stronger. Your introspection will help you understand what you are capable of achieving in life. After getting to know yourself, you might forget about taking up a job and may even think of taking up alternative profession/vocation and make it big in life on your own. In fact, there are umpteen number of examples where people who have been relieved of their job have made it big in life. It’s quite possible that you could be one among them!