Courtney C. Lipsey Job cuts will likely accelerate as the Australian economy begins to slow down due to the higher interest rates. In addition to this, artificial intelligence could have an impact on future white-collar workers, and you can see why people are worried about their future employment.
When I feel anxious, I find that the best way to reduce stress is to think about what I would have done if I were to experience the situation that keeps me up at night.
Worst-case scenario planning.
When I know what I will do, the anxiety disappears, even if it is not pleasant.
This week’s episode may help you take back control and move forward positively.
The Payout
You will receive a payout if you’re made redundant by your former employer. This payment will include unused leave entitlements and a redundancy payout based on years of service.
The tax treatment of these redundancy payments is very favorable. The first $11,591 in redundancy pay is currently tax-free, and there is also an allowance of nearly $5,800 per year of service.
If you have completed ten years with your employer, you will be entitled to a redundancy allowance of $ 69,561 tax-free. Your employer’s payment will depend on your wage and current employment conditions. Most likely, you will receive a tax-free redundancy payout.
Estimate your redundancy payment. You may find a formula at your workplace. You could also ask a former colleague who was laid off what formula they used. You will usually get four weeks of pay plus two extra weeks for every year you have worked. It is possible to estimate the amount of money you will receive in the event of a redundancy and then use the figures I provided earlier to calculate how much would be tax-free.
You can estimate the amount of money you will receive if you are made redundant by adding your annual leave and long service entitlements.
Next, you need to calculate how many months your income will last. We often see clients who have payouts that will cover their expenses for six to twelve months. It’s very rare not to find a job with such a runway. Redundancy payments are often used to pay off mortgages or invest in nest eggs.
Consider where you can cut costs if your redundancy payment is not enough to cover your expenses while you look for a new job. You may be able to temporarily reduce your mortgage payments to the minimum or shift them to only interest.
You may be able to reduce your short-term living expenses to make sure that you get the most out of your redundancy payment.
It is important to have a clear understanding of how your finances might change and what you will do if you are made redundant.
Consider what comes next.
The financial stress should now be lessened. The next step is to take a walk and think about your future. You may want to remain in the same field or profession. What makes you happy, and what makes you miserable? You may have a chance to make significant changes if your payout is large enough. You might be able to accept a lower-paying position or complete your studies to make a career change.
People who have lost their jobs often express a sense of exhaustion. It could be worth investing a few weeks or even months to relax and recharge your batteries. You may be entitled to a portion of your pay as long service leave or annual leave. So, there is no need to feel bad if you don’t start looking for a job right away.
Networking
After you have taken some time to consider where you would like to go, you should think about the people who could help you reach your goal. You might want to talk with former colleagues, LinkedIn connections, or friends of your friends about the industry.
Many recruiters claim that the best jobs never get advertised. Employers will reach out to someone they think would be an excellent fit when they become aware that they are available. This can only be achieved if you let as many people know as possible that you are looking for a job, what kind of role you want, and your skills and background. You can’t find a better advocate than a former colleague or manager.
It’s time to improve your skills!
It is not new to think that you must be a lifelong learner. When redundancy is a possibility, it is advisable to ensure your skills are current.
Your network is a good source of information on the skills that are in demand at the workplace. You can brush up on these skills by taking short courses online. These online courses are often free or have minimal costs.
Can self-employment provide the solution?
You will have learned from my Financial Autonomy Book that self-employment is one way to gain choice. In previous episodes, I explained that the Financial Autonomy Framework was developed by reverse engineering my experience with hundreds of clients and reflecting on strategies used by the most successful people later in life. Many of my most successful customers were self-employed. This is something that I seldom see in content about money and financial freedom.
Self-employment may not be for everyone. If you enjoy wearing many hats – from chief salesperson to marketing to financial controller – perhaps redundancy is the ticket for you.
A financial runway is usually required to start a new business. In 99% of cases, the revenue generated by a newly founded company will be minimal for the first few months.
Often, this financial valley of death is the obstacle that stops people from leaping. A redundancy payment could be the Evel Knievel of your life. Your self-employment venture can gain momentum with the cash you receive.
For me, moving from an employee to a self-employed position is a pivotal point in my life. It’s right up there with meeting my wife. It can be wonderful to have the freedom to choose a career path that is right for you without compromise and with a lot of flexibility.
Ask for help.
Don’t hesitate to ask for help if you find yourself in a situation where redundancy is a possibility. Large employers often provide outplacement services. Make the most of these services. You can also contact career coaches like Kate Richardson, whom I interviewed a few months ago, to share their experiences and help you progress.
Confidence can be affected by redundancy. You can get some psychological help if you are struggling. Talking through your concerns with a professional can help you overcome your fears and move on to the next exciting phase of your life.
Talk to your financial advisor about the financial aspect.
Many people will be made redundant during their careers. It’s not fun at the time. In the majority of cases, people will look back to five or ten years and realize how great it was to be able to change careers. Think about the ideas I have presented here and see if they can be applied to you. Redundancy could be something you look forward to rather than a bad experience.
