Surviving a Layoff

Companies expand and decline all the time. Expansion and cost-cutting has a direct effect on employment. Companies on expansion hire aggressively. Declining companies layoff employees just as aggressively, if not more so.

Financial Services Industry

When the prices of financial assets rise (bull markets), firms expand and the rate of employment increases. On the other hand, when the prices of financial assets decline (bear markets), financial services firms layoff people and slash payrolls.

Financial services firms do not recommend buying in bull markets and panic selling in bear markets. They advise their investors against creating long-term plans, sticking to them, and getting caught up in a passing craze.

When it comes to managing its operations however, the financial services industry does not follow its own advice. They monitor profits closely, and on a daily basis.

The tiniest shortfall from either plan or trend can cause full-blown panic in the executive levels. But when it comes to employment, hiring and layoffs (during bull market and bear market respectively) is always inordinate. Thus, employee loyalty is quite low in the financial services industry.

Long-term personal strategies

Structure your career to gain experience in a number of functional areas. This is so that in case your current work area has to undergo reductions, you will have skills and experiences to make a transition to another area in your firm that is withstanding the cuts.

Stay in contact with previous employers, mentors and colleagues who are in other areas of your firm or who have moved on to other companies. Be up-to-date of both the current opportunities where they are, and what the expectations appear to be.

With the industry’s employment nature, you cannot afford to wait until the layoffs are threatening you to make plans (whether to transition to another area or move on to another company altogether), because then it would be too late.

Building a good, ongoing relationship with a reliable executive search firm is also important because it is a means to stay on top of hiring trends and to get right exit signals next time, if necessary.

Short-term personal strategies

Start working on your contacts at the onset of bad market conditions, negative profitability reports at your firm, and/or rumors of forced reductions.

Employment and pay in individual lines of business are less volatile over market cycles than institutional lines. If you are in, for instance investment banking or securities trading, you might want to do retail or individual lines for a while, while there are reductions going on.

 
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