Surviving a layoff
5 Tips: The tools you need to come out of a layoff in good shape.
NEW YORK (CNNMoney.com) - Ford motor company plans to cut 30 thousand jobs over the next six years. That's about 21 percent of its workforce.
And if Ford is downsizing this much, can your company be next? In today's top five tips we're going to tell you how you can cope with job loss.
1. Read the writing on the wall
If you're like Ford's autoworkers and you know in advance about a layoff, you'll be much better prepared. Be on the lookout for some layoff warning signs in your own company.
Some of these signs include expense reductions, hiring freezes, management resignations, travel cutbacks and your competitors cutting jobs. Keep in mind these aren't always signs of a layoff, but make sure you monitor your work environment.
First of all schedule, medical or dental work now, while you still have health insurance. Update your resume and actively maintain your network. Make sure you check in with members of your network with a quick phone call or e-mail.
If you want to expand your network, check out online networking services such as www.linkedin.com or www.ryze.com. These services let you sign up for free and you'll be able to connect with other members and invite colleagues so that your network is constantly expanding.
2. Get a better package
If you're part of a union, your separation package is primarily based on how long you've been with the company. Terms vary by union contracts, but if you're in a strong union like the autoworkers, says Steve Miranda, of the Society for Human Resource Management, you'll generally get a more generous severance package.
If you're a non-union employee, your separation package is also based on tenure (generally you'll get one to two weeks severance pay for every year according to Bill Coleman of Salary.com) but it's also based on your level within the company. And surprise surprise, a CEO's severance will far outweigh that of a mid-level employee, no matter how long and hard they've worked for the company.
And while it may be harder to negotiate in a mass-layoff situation, it's definitely worth your time to try, according to Alan Sklover, a compensation attorney and author of "Fired, Downsized or Laid-Off: What Your Employer Doesn't Want You to Know."
Many times union separation packages will include training and re-skilling says Miranda. For example, some autoworkers may consider a second career as a licensed nurse or mortgage brokers.
With white collar workers, most separation packages have outplacement services that will help polish your resume and find you a new position.
But if you want to start your own business, you may want to ask for a cash award in lieu of outplacement support. Or maybe you just want to move altogether. Get relocation assistance.
The trick to getting what you want is making sure you are respectful, your requests are reasonable and you give the reason behind your request. The worst they can say is no.
3. Collect what you're owed
There are some things to which an employee has a right after they leave. Health care coverage is one of them. COBRA is a federal law that allows you to continue your health care coverage up to a year and a half after you leave your job.
You generally have 60 days to decide if you want this coverage. If you have a pre-existing condition or you're going to be traveling overseas, you'll want to take advantage. But remember COBRA isn't cheap. You'll be required to pay full premiums and administration fees of 2 percent.
Most companies will pay your medical coverage through the month. So if you get laid off on Jan. 30, see if you can push it to Feb. 1st. If you think you'll have another job lined up within those 2 months, or you're able to join your spouse's health care plan, you may want to rethink getting COBRA coverage.
You also have a right to whatever money you've collected in your 401(k) and your pension benefit plan. Don't forget to roll over your 401(k) or your pension into a Traditional IRA using a trustee-to-trustee rollover. You'll have more investment options for your retirement and you won't have to pay penalty fees that come with taking a cash disbursement.
Keep in mind that you can't do a direct 401(k) rollover into a Roth IRA because of tax laws, according to Hewitt Associates, but funds may be transferred from a traditional IRA to a Roth IRA.
If you have a flexible spending account you'll generally want to use your allotment before you leave the company. And don't forget those stock options. If you have vested stock options, check the price and decide if you should exercise them. If it makes sense, you'll typically have 90 days to do this, otherwise you'll lose them.
"There's nothing worse than having free money just taken off the table," says Miranda.
4. Don't forget that Rolodex
So, you've been given the pink slip. Make sure you take the stuff that will help you find another job. Make sure you grab all those contacts and networks you've been establishing. But you may want to leave company property.
These are documents like customer lists, financial data, strategic plans and contract information. If you get caught, you could lose your severance or get sued, according to Miranda.
You'll usually have some time to return gadgets so you'll be able to retain any personal information. But in case you're required to hand these gadgets in right away, you want to be prepared.
If you have a laptop computer you have to return, make sure you download the personal stuff. If you kept contacts on your Blackberry, make sure you have backup copies at home.
5. Don't burn your bridges
Walk out the door with dignity, says Richard Bayer of the Five O'Clock Club. You don't want to do anything spiteful.
Before you walk out of the door, get a recommendation. Even if you're not parting on the best terms, remember that this job is going to be on your resume so you may as well get a good review (or at least a neutral one).
If the layoff was a result of downsizing and not an indicator of your performance, a letter of recommendation that explains why termination wasn't your fault might come in handy.
Gerri Willis is a personal finance editor for CNN Business News and the host for Open House. E-mail comments to email@example.com.