5 Things To Do After Getting Laid Off (Beyond Looking For A Job)
You’re a recently laid-off consultant. It’s your opportunity to do more than mere job searches. Use this forced break to gain control of your life.
We are rich and complex beings. So, we need a multifaceted solution to move forward during this fragile time. Photo by Matthew Henry on Stocksnap.
It’s difficult to hear pundits cheer a resilient U.S. economy and continued low unemployment.
The U.S. Bureau of Labor Statistics's August 2023 unemployment rate stood at 3.8%. This equals 6.4 million real people not working, though they’d like to. This number includes many consultant friends of mine. It is no secret. Clients release us first as they tighten expenses to preserve profitability.
I count over 30,000 consulting job losses so far in 2023. A short list of reductions: Accenture 2.5% (19,000 people), Deloitte 1.5% (2,000 people), Ernst & Young 5% (3,000 people), KPMG 7% (2,000 people), and McKinsey 3% (3,400 people). The latest, reported on Sept 7, 2023, is Slalom 7% (900 people). I haven’t captured smaller consulting firms in my list. Many independents are also not finding work.
If you are a consultant recently laid off or at risk of it, there are five things you can do to adjust to this tough market.
Know where you stand
Prepare your savings
Assess your living expenses
Become a business owner
Stay connected
My advice focuses on the full you, the complete you. It goes beyond looking for another job. Decide after reading the post if your first priority should be finding that next job. As you read, consider preparing your specific list of actions to take with deadlines to meet.
Know where you stand
A layoff is a forced break, so take stock of your situation. As a mid-career professional, you have worked hard and saved well. You may find that you’re not in survival mode. You can get by on your savings, at least for a while. You might discover you can cover annual expenses with only 3–6 months of work a year. At best, you’ve stumbled into a form of financial freedom no longer requiring full-time work. You can move to part-time, high-impact work that is more rewarding. At worst, you reframe your layoff as a sabbatical, which will empower you in the next stage of life.
Take me, for example. My most recent consulting engagement ended in May. I knew it was coming and planned for it. I ran my numbers and calculated that I have savings and other business income to last me two years if needed. I realized I needed to work only six months each year to cover our family’s living expenses. And while I work on finding my next gig, I can spend time building a coaching business that fulfills me.
Prepare your savings and investments
Now more than ever, you must protect yourself against major investment losses. The easiest way to do this is to create and leverage a cash reserve. If you don’t have 6–12 months of liquid, low-risk savings, sell some stock or bonds. Prepare for a possible storm. You’re not giving up much in today’s market. These easy-to-access savings may prove to be your best short-term investment. Today’s very safe money market funds are earning 5%+ returns. But remember that return is not the goal. The goal is control.
Take one of my coaching clients. After a job loss in 2007, Laurette committed herself to building a cash reserve for future crises. And it’s good she did. Laurette spent all of 2019 between jobs. Her savings gave her confidence to land that next great job.
Assess your living expenses
It’s much easier to stay confident between jobs when you have fewer living expenses. But I don’t recommend cutting to the bone, either. To me, budgets are like diets…they will be broken. Instead, I recommend the financial equivalent of eating better. Put in place a no-budget budget. In it, you don’t set future spending limits but instead target past spending habits. You aim to align your spending with your values. You make spending changes based on that yardstick. The approach is less restrictive, so it is more likely to stick.
Assess your living expenses from largest to smallest. This rewards your efforts in order of impact. For me, I found grocery to be a huge opportunity. I could not believe how much money our family spent on groceries in the last year. As a result, I’ve dropped my Instacart/Whole Foods habit and turned to Trader Joe's. I’ll be able to cut our grocery expenses in half. We’re keeping our personal trainer. We value health and supporting an independent business. In all, we’ll shave $20,000 off our expenses by making small changes aligned with our greater goals.
Become a business owner
Kevin Kelly, the legendary founder of Wired Magazine, said, “If you do only what you can do, you won’t need a resume.”
This equation helps us further dissect the quote’s meaning:
Valuable micro-niche + Your unique advantage = Golden ticket
Understand your unique advantages as a consultant. Then, go very narrow and deep in the services you offer so long as they are valuable in the marketplace. For example, I manage large information technology projects for my clients. I work across different technologies but only with business and operations leaders. I leave the detailed technical management to someone else. Also, I have chosen to focus on a single, large client where my deep experience is highly valued. Even when consulting budgets are tight, I’m able to find work. Next, go all in…
Become a business owner. That’s right. I recommend you start an independent consulting business and go right to the client. You get closer to your customers. You also capture more of the revenue earned. And you keep more of it, too, through tax savings awarded to small businesses.
Stay connected, as always
Ramp up your networking efforts. Schedule short, 30-minute meetings to stay connected. The purpose of the meetings is not to beg for a job but to learn more about each other’s lives and work. Concentrate on deepening your relationships and looking for ways to help each other. I recommend scheduling coffee over Zoom. It’s so efficient! Earlier this year, I had six meet-and-greet conversations in one day (from 2,000 miles away). It works.
Start with your active connections. Because you’re in touch with them, reaching out for a short meeting isn’t out of the ordinary. Second, focus on your closest friends and former colleagues. Not only is it wonderful to catch up, these people are the most likely to help you. Third, expand your network by joining relevant consulting networks.
To get you started, here is a short list of independent consulting networks:
Business Talent Group (BTG), Rose International, Umbrex, and Professional Independent Consultants of America (PICA) are big in the United States.
In Europe, try Eden McCallum, Independent Management Consultancies Network (IMCN), and CoMatch.
Independent consultant marketplaces include Internal Consulting Group (ICG) and Improveo.
And many mid-tier consulting firms have independent contractor networks that supplement their teams. These can be a good fit if you have specific niche skills.
Last week, I asked a former consulting colleague, Lisa Hochberg, in Los Angeles, how she was doing. She answered like so many other friends of mine:
“What’s top of mind right now is survival in a tough market with layoffs happening all around us.”
I hope my advice not only helps you survive this tough market but also sets you up to thrive.
Remember:
Know where you stand
Prepare your savings
Assess your living expenses
Become a business owner
Stay connected
And a bonus:
6. Take care of yourself. Ask for help. And do what you need to stay mentally and physically strong.
I wish you the best out there.
—
Brian Herriot speaks with consulting colleagues from his home in Alameda, California, and cabin in Hazelhurst, Wisconsin. He also prepares financial freedom plans for consultants and other mid-career professionals in one-week sprints. Check out his take on a new and different kind of retirement at choosyconsultant.com.