10 Hard Truths About Layoffs
Who ever imagined that
change-the-world companies like Cisco, Dell, and
Hewlett-Packard would be laying off thousands of workers?
And who thought that you would be among them -- or worried
that you might be next? Here's a personal survival guide for
tough times.
Many
things about the dotcom boom were, in retrospect, obviously
unsustainable: absurd stock-market valuations, 24-year-old
CEOs, dogs in the office, investment bankers clad in khakis.
But perhaps nothing was quite as surreal as the white-hot
condition of the labor market. Talk about bargaining power!
Freshly minted college grads of no particular distinction
commanded salaries that their parents worked a lifetime to
achieve. Run-of-the-mill software developers were hotter
than first-round NBA draft picks. And the biggest challenge
facing an aspiring "biz dev" wizard was deciding which of
several competing offers was most likely to end in a Porsche Boxster.
In
case you hadn't noticed, the party's over. In the first five
months of this year, U.S. companies cut 652,410 jobs --
38,650 more than in all of 2000, says John A. Challenger,
CEO of the international outplacement firm Challenger, Gray
& Christmas. Some 41% of those cuts have come from the
technology and electronics sector, he adds. And we're not
just talking about lousy companies. Some of the best-known,
most highly respected companies in the world -- companies
that we've celebrated in the pages of Fast Company -- are
cutting jobs by the thousands, even the tens of thousands.
Cisco. Intel. Dell. Hewlett-Packard. They are the great
names of the new economy -- and their plans for the future
seem to involve getting there with fewer people.
Which
brings us to the topic that we plan to explore all week: How
does a smart person with big career ambitions adapt to the
drastic changes in the labor market and retool for the
challenges ahead? How do you respond to the new era of
downsizing without downsizing your dreams? We begin with
some tough love -- a collection of lessons that aren't
always pleasant to hear, but which we think will prepare you
for the challenging months ahead. We talked to CEOs of major
corporations and executive recruiters at some of the
nation's top search and outplacement firms. We've distilled
their insights into a short, unsparing -- but not unhopeful
-- list of 10 hard truths about layoffs that your father,
your college recruiter, and your local HR representative
likely never told you.
But
don't forget the most important lesson of all. Markets go
up, and markets go down. Digital technologies catch fire and
then burn out. But through it all, the defining truth of the
business world is that people are still front and center. If
you're a talented person with a real passion for your work,
you are living in the right times -- layoffs or
not.
1.
There are worse things than being laid off -- like staying
in a bad job for "security."
For
the past five years, everybody's had the same dream: to find
work that doesn't feel like work, where every day is a new
challenge, where what you do really matters to your company
-- and to you. In a period of economic doldrums, it's
natural to let that dream fade -- to hang by your bloody
fingernails to the edge of your desktop, even if the job
you're holding doesn't pass your personal desirability
test.
But
is that really how you want to spend your days? Is
downsizing your ambitions the right way to respond to a
downturn? It's true that good jobs are harder to find now,
and nasty things like mortgage payments and phone bills
conspire to make chucking it all unrealistic. But the
soul-deadening effects of a bad job reverberate far beyond
the 40 hours you spend grinding through the
workday.
So,
if you're in a crummy job, don't give into the temptation to
just keep toughing it out because it's safe. And if you've
been "downsized," don't rush to settle for the first job
that comes your way. One of the new realities of the next
economy is that a patchy résumé is no longer
considered cool, says Philip D. Simshauser, president of the
Center for Executive Options at the outplacement firm Drake
Beam Morin. "Job-hopping used to be about chasing growth or
following technology," he says. "But now, saying you've only
been at a job for a couple of months because you made a dumb
decision doesn't play well. Having multiple short jobs on
your résumé damages your
credentials."
So
be sure your next move is to a place where you're likely to
stay a while. And if it takes a little longer to find that
job, so be it. Make sure that when you next hear "Welcome
aboard!", your first reaction won't be to run for the
gangplank.
2.
In fact, losing your job may be the best career move you'll
ever make.
Let's
not be Pollyannaish about being laid off. Being out of work
is no picnic, especially in such trying times. But if the
Internet economy lured you into a job that wasn't really
such a great fit, now may be a good time to rethink what you
originally planned to do with your life.
"Layoffs
provide a good time for reflection, a time to rethink who
gets the privilege of having you work for them," says Rayona
Sharpnack, founder and president of the Institute for
Women's Leadership. "So don't frame the event as a personal
failure. Losing a job doesn't make you a ne'er-do-well or a
throwaway. Make yourself a promise that this time, you're
going to find work that fits your terms. Ask yourself this:
As the architect of your own life, as the creator of your
own future, what are the criteria that you have for who gets
the privilege of having you? That's a totally different --
and healthier -- mind-set."
A
side note: Challenger says that opportunities still abound
in the education, health-care, and energy industries -- none
of which depends on the sale of banner advertising for
revenue. Think outside the employment box. There are plenty
of appealing options in less-hyped industries.
3.
But don't be surprised if you are unemployed longer than you
expected at first ...
Data
on length of job search is contradictory: One study by
Challenger, Gray & Christmas says that the first quarter
of 2001 had the shortest median job-search time -- just 2.27
months -- in the firm's 15 years of tracking this index. But
a more recent study by Drake Beam Morin says that the median
length of time it takes to land a new job is starting to
rise. Drake Beam Morin's data says that the average job
search now clocks in at between 3 and 4 months, depending on
industry and position.
Companies
are taking longer to fill positions. Or they're postponing
expansion plans that would have created new jobs.
Bottom
line: The days when you could post your résumé
on a Web site, or tell a few friends you were in the market,
and then sit back to wait for the offers to pour in are
gone. So you may want to reconsider blowing your entire
severance on a two-month trip to Europe. Tuck some in the
mattress for rent should the search prove more arduous than
anticipated.
4.
... Even though it often pays off to move
fast.
After
a couple of years spent working 24-7, it's tempting to wait
out the downturn with a well-deserved break. Travel a
little. Catch up on your reading. Get your head together.
But, our sources say, you do so at your own risk. Nobody's
predicting a turnaround before the fourth quarter, and some
industry veterans who have lived through previous
corrections are downright gloomy about prospects for a
robust recovery before early next year.
Their
advice? Get out on the street, and do it fast. "Don't take
the summer off," says Challenger. "Don't go on sabbatical.
The unemployment rate is still only 4.4%, but it may get
worse. In 1982, it was more than double that. Move while
there's still some luster on your
résumé."
5.
By the way, the Internet won't necessarily solve your
job-search problem.
If
you think moving fast means posting your
résumé on the Net and spamming prospective
employers with email, you're living in the past. That
strategy is so 1999. For all the Internet's wonders, the Net
still can't touch person-to-person networking when it comes
to finding good jobs.
In
2000, the vast majority of Drake Beam Morin clients -- 61%
of them -- found new positions through networking, while
only 6% found them through online job searches. Keep in
mind, Simshauser says, that this not a paper process -- it's
a people process.
So
spend the evening doing your research or surfing the job
boards. But spend your days out of the house. Go to
professional meetings. Join organizations. Get involved in
local government or volunteer work. Even pink-slip parties
are worth a look since they're filled with fellow job
seekers who may turn up leads that are better suited to your
skills than theirs. "This is still a world where the best
way to convey who you are is through somebody else's
recommendation," says Simshauser.
6.
You might have to settle for less money too.
Remember
those giddy days when employers were forking over signing
bonuses, paying bounties, and promising rafts of options to
everyone from the CFO to the office admin? We regret to say
that those days vanished along with record highs on the
NASDAQ. Drake Beam Morin's Simshauser says that the offers
he's been seeing are flat. "The high salaries have gone back
to their old-economy standards," he says. "There's still a
premium for good people at all levels, but right now, there
are a lot of good people in the market."
The
good news? Many companies are offering more cash and less
equity. Two years ago, that policy would have been a deal
breaker. Today, it just makes sense. You can't pay the
electric bill with underwater Yahoo! options.
7.
And you might find yourself at a more conservative
company.
Suddenly,
those old-fogy companies with org charts, dress codes, and
silver-haired CEOs are looking a little more attractive.
Have they gotten sexier, or is it just their earnings
statements that have a certain pheromonal appeal? Our
sources tell us that even some new-economy diehards are now
open to overtures from the larger, more-established
companies they once spurned.
"Candidates
who dismissed old-economy companies as not being exciting
enough now place higher value on stability and a big
paycheck," says Marc D. Lewis, managing director of the
technology and venture practice at the executive-recruiting
firm Christian & Timbers.
This
is not to say that everybody's going to work for insurance
firms and machine-tool manufacturers -- although there's
nothing wrong with that. But even the hottest CEO candidates
are being downright fussy about their next gig, veering away
from companies whose ideas may be promising but whose
funding may be dicey, to those whose prospects seem more
secure. And many are opting for Global 1,000 companies,
where they can apply their Internet experience within the
enterprise, but without the constant pressure to achieve
profitability.
Challenger
suggests that job applicants lose their new-economy
arrogance. "Don't reject a company out of hand because it
doesn't have the appearance of the dotcom culture," he says.
"You can find pockets of excellence in many
companies."
8.
You may also have to consider a different
city.
Remember
the old real-estate mantra, "Location, location, location"?
Same thing's true in the job market. For the past five
years, the Bay Area has been as potent a magnet as
Haight-Ashbury in the Summer of Love. But the dotcom
debacle, coupled with a cost of living predicated on a
healthy market for IPOs, has had a drastic effect on the
city's workforce.
"California
seems to have been hit by an earthquake," says Lewis. "The
number of people pulling the rip cord and trying to get out
is gargantuan." Data from U-Haul's Mountain View office in
Silicon Valley indicates that from December 2000 through
February 2001, some 43% more families left the region than
entered. That's compared with only 7.5% for the first half
of 2000.
Where
are they heading? Challenger says that Houston, with its
energy businesses, is hot again. Charlotte, North Carolina
is still healthy, with its combination of high-tech and
banking. And overall, the Northeast, which has more medium-
and large-sized companies and a more diversified base, seems
to be holding up better than some other regions, according
to Lewis.
9.
For all the turmoil, never forget that your professional
life span is longer than that of most
companies.
Still,
maybe the thought of going to work for a large conglomerate
in Chicago or Dallas just isn't doing it for you. Maybe a
layoff is a way of telling you that you were never meant to
work for a big company. Consider working for yourself. Then
all staffing decisions will be yours and yours alone. And
besides, you're likely to be around longer than Napster,
Netscape, or Megagigabyte.com anyway. "Free agency is often
a better place from which to weather a bad economy, since
your future is not lashed to one company or to one big
client," says Dan Pink, author of Free Agent Nation.
"When a company has layoffs, a lot of people think that
they're better off buckling down and doing twice the work,
but it's a fool's bargain. As a free agent, if one of five
clients disappears, you can weather it.
Pink
notes that the fundamental unit of business is still the
individual. "There is a fairly sizable change in human
longevity versus organizational longevity. Think about
Netscape. It's unlikely that Netscape will exist in 10
years. But most people will. I'd put money on me over any
company in the S&P 500. I'm not going to be
acquired."
10.
So your real job is to find what you love and then find a
way to do it. (Return to point 1.)
Ultimately,
your goal should be not just to find another job but to find
work that feeds your soul -- no matter the business climate,
the state of the Dow, or the mood of Alan Greenspan. And
that's the real truth.
Linda
Tischler (ltischler@fastcompany.com)
is the Fast Company managing editor of new
media.
