Like a black cloud on the horizon, the prospect of mass unemployment is looming large.
The impact of coronavirus on Britain’s businesses can already be seen with large-scale redundancy plans by the likes of Marks & Spencer, easyJet, Boots and British Airways. The ending of the furlough scheme in October is only likely to fuel the jobs bonfire.
But it isn’t just the big corporations that are letting staff go. A recent survey by the Federation of Small Businesses found that one in ten small firms have already had to make redundancies despite support from the Job Retention Scheme – and many more jobs will go once the scheme ends.
The Office for Budget Responsibility is predicting that jobless total will peak next year at 3.5m
The Office for Budget Responsibility is predicting that the jobless total will rise from 1.3million to 3million by the end of the year – an unemployment rate of 12 per cent – and will peak next year at 3.5million.
So far, the brunt of job losses has been felt by younger people, but older workers are not immune. People established in their careers are just as vulnerable to cost-cutting and for them getting back into the jobs market could be tricky.
Sarah Coles, personal finance analyst at wealth manager Hargreaves Lansdown, warns: ‘The older you are, the more difficult it can be to find work. Even before the crisis, workers over the age of 50 were a third more likely to be unemployed for more than two years than their younger counterparts.’
So if you know (or suspect) your company is about to cut jobs, what can you do to minimise the impact on your finances and maximise your future work prospects?
First… get your finances in shape
It is essential to have a financial buffer to fall back on if the worst happens. Coles says: ‘Anyone of working age should try to build a sum equivalent to between three and six months’ worth of household expenses in a competitive easy access savings account.
This is different from three to six months of income and it should cover the cost of household essentials. If you’re worried about being made redundant, building such an emergency safety net should be a priority.’
Anna Bowes, a director of rate scrutineer Savings Champion, says: ‘Money in your bank account can easily be spent, so syphoning it off into a savings account ensures it is separate and is there for emergencies only. Currently, NS&I has the best easy access accounts – Direct Saver, for example, pays 1 per cent interest and you can open and top it up with as little as £1.’
Now is the time to tackle any outstanding debts and reduce monthly expenditure
Now is also the time to tackle any outstanding debts. Rachel Springall, savings specialist at Moneyfacts, says: ‘If somebody’s circumstances were to change for the worse, they may find it difficult to acquire a new credit card or loan. So now is a good time to switch credit card debts to a zero per cent introductory offer.’
M&S Bank currently provides the ‘best’ credit card balance transfer deal – 28 months interest-free, but subject to a 2.85 per cent fee levied on the debt transferred.
Another way to reduce monthly expenditure can be to remortgage. Springall says: ‘There are some competitive remortgage deals around, especially for those who have a reasonable amount of equity in their home.’
Budgeting is key. Make a list showing all your monthly outgoings, check which you can cut back on, and see how you can make essential bills cheaper – for example, by switching utility provider. Budgeting tools provided by the likes of MoneyDashboard can help.
Redundancy insurance is no longer available. But it might be worth considering income protection insurance which pays out a percentage of your income if you develop a long-term illness or have an accident that means you can’t work. But this won’t help if you lose your job. Visit Money Advice Service for a guide to income protection.
Your rights if you are made redundant
It can be traumatic if the axe falls, but employment law means you are not left high and dry.
You are entitled to statutory redundancy pay as a minimum: half a week’s pay for each year you worked while under 22; one week’s pay for each year worked between 22 and 41; and one and half week’s pay for each year you were 41 or older, up to a maximum of £16,140.
Redundancy pay should be based on your usual pay, not any reduced furloughed income, but weekly pay is capped at £538 a week. You should also get paid for any unused holiday and while you work your notice period.
Your employer may offer more, including extra redundancy pay, help finding a new job, or extending benefits such as health cover for a period after redundancy.
So check your contract or talk to your employer’s human resources department.
Prepare for an interview by Zoom
Video conferencing software such as Zoom has become familiar to many of us during lockdown, but prospective employers have also had to use it as a new way of recruiting.
Around 90 per cent of interviews at Hays are now conducted remotely, having previously been almost entirely face to face. This is likely to become commonplace for first interviews at least.
Trial run: Interviews are now online
To make sure you come across at your best, try these tips: do a ‘trial’ run the day before to check the sound and lighting (you don’t want to be a silhouette or have a messy background); record yourself on video so you can see how you come across; have your CV and notes with you as in a physical interview and above all, stay calm.
Technology failing isn’t a problem, but you coping badly with it will not reflect well.
Start looking for a job immediately
With thousands of people facing redundancy, the jobs market has never been more competitive. So it is vital to look for a replacement job immediately and attempt to make yourself stand out from the crowd.
Jane Donnelly, of employment agency Hays, recommends keeping an open mind. She says: ‘The ongoing global situation has inevitably caused changes in demand across skills and industries. So try to be flexible and perhaps look outside your usual field.’
It’s also worth doing some research so you can tailor your applications accordingly. Donnelly adds: ‘Organisations and entire industries have gone through a huge amount of change in recent months, so read up on what impact the pandemic might have had where you’re applying.
‘This insight will come through in your application and also give you vital context for discussion in an interview.’
Give yourself the best possible chance
Experts say it is crucial that your CV is tailored to the specific role to which you’re applying. ‘From a hiring point of view, it’s not hard to tell which CVs have been modified and which haven’t,’ says Donnelly.
‘Not taking the time to personalise a CV indicates that you’re not overly enthused about the position and haven’t spent adequate time researching the role and organisation.’
Experts say it is crucial that your CV is tailored to the specific role to which you’re applying
Your CV must look clean and well structured, typically be one to two pages long and in a simple font such as Arial, 10-12pt, with formatting such as italics and underlining kept to a minimum.
It should include a summary of your skills, relevant work experience, your achievements, education, and interests, and that references are available on request. Make sure it is up to date and get a friend to scrutinise it for mistakes.
But your CV is only one tool in the jobs battle.
Donnelly says: ‘Consider your LinkedIn profile as a living, breathing version of your CV. Used properly, it can help establish your professional identity and grow your network – all of which will make you stand out to potential employers.’
Make sure your profile has a professional photo, a customised URL and a clear layout of your experience and achievements.
You can also optimise your profile by using relevant keywords. Incorporate these into the summary, experience and skills sections of your LinkedIn profile to increase your chances of being found by the right people.
LinkedIn also has a selection of courses if you need to add other skills to your portfolio.
Employers are also increasingly looking at other platforms such as Facebook, Twitter and Instagram. ‘While you may choose not to share your professional life on these platforms, make sure that a prospective employer won’t be put off by anything inappropriate,’ advises Donnelly.
Where to look for a new position
Finally, be creative in your job search.
As well as online jobs websites such as Monster and Indeed – and recruitment agencies such as Hays and Reed – try the Job Centre’s Rapid Response Service, the National Careers Service – and don’t forget to approach employers directly.
The ‘hidden job market’ describes jobs which are not publicly advertised, so take the plunge and target your dream job.
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