Big Book of Job-Hunting Hacks

Replacing the paycheck after losing a job is an immediate and serious challenge for all workers. There are few events more jarring than losing your source of income, which we need not only to supply the basics needed now, but also for future security. Every worker grapples with this issue regardless of income level. When the paycheck stops, the fun ends, as well. Here are some viable options to deal with this mess.

Usually, employers provide let-go workers with severance packages, which vary in form and content from one company to another. To make sure you are receiving what is owed to you by the company, check the offer letter you received when you joined the company. It is common for companies to award one week of severance pay for each year worked to those in midlevel management positions. Workers at the director level and up will receive greater severance pay.

The severance package is an important benefit. Use it wisely while you continue through the process of rebuilding your career. It is akin to receiving a paid vacation. Use this period of respite to plan your strategies for replacing income while you are unemployed. Here are five ways to ensure that you will have sufficient financial resources during your period of unemployment:

Some call it the safety net system. Others call it welfare. Whatever the term, it is the best system we have to help unemployed workers through a difficult time. It is referred to as unemployment compensation, unemployment benefits, or unemployment insurance depending upon the jurisdiction and the type of separation from the employer. The system originated in 1935 when President Franklin Delano Roosevelt signed into law the Social Security Act. It has had many iterations over the years. Always check to see what is owed to you.

Do not confuse workers’ compensation with unemployment compensation. They are two different programs. Workers’ compensation provides benefits for workers who suffer injuries while on the job. Unemployment compensation provides benefits for workers who are laid off.

Unemployment compensation comes from the joint federal and state operation that was devised to provide substitute income for workers who lost their jobs. It is administered by each individual state. There are well-defined requirements that must be met in order to collect these benefits. The employer who terminated you must disclose your unemployment benefits before you leave the premises. If this did not happen, immediately contact the human resources director of your former employer for an explanation of how the benefits apply in your situation and what the procedures are to apply for benefits. In addition, contact your local unemployment office for advice and guidance. You can do that by phone, but the best way to get immediate results is to make a personal call at the nearest office.

Some workers are hesitant to tap into the system because of embarrassment, arrogance, or fear of hurtful gossip. However, remember that the system was created to help unemployed workers provide for the basics for a limited period of time and is funded in great part by unemployment insurance paid for by the employer and the worker through payroll tax deductions. You have paid for this insurance. Use its benefits whether your income was $5,000 per month or $20,000 per month.

Stereotypes abound depicting the “type” of person collecting unemployment benefits. They are frequently thought of as uneducated and holding low-skill jobs. Think again. I learned firsthand about people collecting unemployment compensation when I was laid off after the company I was working for was sold. I had a mortgage payment, a car payment, insurance payments, and college tuition bills for three of my children. Soon after being laid off in a companywide conference call, I visited my local unemployment insurance office. It was a bare-bones environment crowded with hundreds of unemployed workers applying for benefits. Some were dressed in upscale office attire, some in casual clothing, and others in clothing worn for hands-on jobs. While waiting my turn to meet with a counselor, I spoke with a physician, a sales rep, and a truck driver, all unemployed, like me. All of us were in the same boat—let go and needing a short-term fix to survive. It was a humbling experience, and from it I learned something that you could not find in a textbook or an Internet search. My benefits lasted for three months. I used this time to explore my career path and decided to start my own business, executive recruiting in the for-profit education industry. Without the unemployment benefits to carry me through a very challenging period of my life, my future may have taken an unwanted direction.

Occasionally, the employer who let you go will hire you back to undertake a specific task on a contract basis. Why? Because it saves the employer money. This arrangement has benefits for both you and the employer. For you, it keeps the paycheck coming in, and for the employer it eliminates the added cost of benefits, usually about 30 percent of base salary. To make this happen, you must take the initiative and make a proposal to the employer. For example, employers who exhibit at trade shows need company-knowledgeable workers to administer the operation with the convention centers, display companies, and transportation companies such as FedEx, in addition to coordinating schedules of company employees who will staff the exhibit booths. Sometimes the company has one of the marketing staff handle these tasks, but when workers are let go, the job of coordinating trade shows is outsourced to reduce costs. Who better than a laid-off employee who knows the company’s products and operations to coordinate trade shows on a part-time basis? To initiate the process, contact your former HR director or marketing director and present them with a proposal to manage trade shows on a per-event basis. An added benefit is that you will meet numerous potential employers at the convention center hosting the event you coordinated.

While you are looking for new employment opportunities, you have the option of seeking a part-time job with an entirely new employer, maybe in an entirely new business. Job hunting can be a full-time activity, but you can allocate a certain number of hours to working on weekends. Remaining active in the workplace will build your network, enable you to explore alternate job opportunities, and keep you mentally alert.

If you need serious extra money and have a personal portfolio of investments in equities, consider selling some or all of them and using the money to purchase income-producing bonds. Use the monthly dividends as income. You can purchase individual bonds or buy into a bond mutual fund, which is my recommendation. Corporate bond funds will have a much greater yield than government bond funds. Caution! Do not tap into your IRA, because you will be charged a hefty penalty for a premature withdrawal. The IRS watches this like a hawk. Once you have secured another job, reevaluate your investment portfolio. You may consider reinvesting your bond dividends instead of moving them to a money market fund, or you may consider exiting the income-producing bond funds and purchasing equities.

If all else fails and you really do need the cash to survive, seek a short-term loan from family members. Use this initiative as your last resort. Parents or grandparents are usually the best sources for personal loans. If you must go this route, prepare a formal written loan agreement stating the amount of the loan and the terms for repayment after you secure another job. Do not assume this is a family jackpot. Repay the loan on time.

The concern over financial matters after being let go does not stop here. We’re talking about reducing risk through the purchase of insurance to protect against mishaps of every kind that cost money, sometimes serious money. In the next chapter, I will walk you through the types of insurance that you will need, not only during your period of unemployment, but also when you are employed again. Stick around.

• Seeking alternate income while unemployed is a common practice.

• Replacing income while unemployed is a short-term strategy, not a permanent solution.

• Frequently, employers will hire back laid-off workers on an hourly or per-job basis.

• Tap into family money as a last resort.

• Do not tap into your IRA, because the penalties are extremely high.