An inevitable fallout of the COVID-19 pandemic is that it will set back the global economy by decades. International Monetary Fund (IMF) has already overturned its statement that the world economy would grow by three per cent in 2020. Now, owing to the draining impact of the pandemic, it has declared that the world economy will contract by three per cent this year.
Consequentially, the effects of COVID-19 on the economy are already visible. The world is witnessing mass lay-offs and bankruptcy. With the unemployment rate increasing and real estate prices decline, the worse is yet to come. It is imperative that you are prepared for the uncertainty that lies ahead.
One of the worst fears of any employee during an economic downturn is getting laid off. While your lay-off is not completely under your control, preparing for the worse and dealing with it rationally, get help to soften the blow. So, we decided to talk to someone, who has well, been there and done that. We had a discussion with Mitul Bid, Founder and CEO, Coditas, who was fired due to the 2008 recession and today stands tall as a successful entrepreneur.
Based on our conversation, we were able to extract the right approach to an economic recession. Here’s what we’ve learnt.
If you’d rather hear from the horse’s mouth, here’s the recording of the discussion.
Preparing For An Economic Recession
Maybe the recession hasn’t hit your company and there haven’t been pay cuts and layoffs. Yet. However, as Mitul recounts, “The repercussions are longer term. The recession came in 2008 and I was laid off in 2009. But it was due to the 2008 recession. The company tried its best to manage but could not.”
So, while there’s always the hope that your company is strong enough to withstand the blow of the COVID-19 recession, there’s no harm in preparing for a situation where it falls. Mitul highlights two things you can do to armour yourself for the uncertain future.
Build Your Safety Net
“I never took a single liability. I had zero EMIs and I never bought anything on credit. I would earn first and purchase something only when I had enough savings to afford it. As a result, even in 2008-09, I had a cash cushion. I was in a situation where even a few moments without an income I would have survived”, shares Mitul.
Savings, especially now, are your safety net to fall back on, when things get worse. Owing to the pandemic, it’s likely that your expenses have reduced on recreation and luxury. You are not shopping too much, ordering in often and are not heading to the mall or theatre every now and then. And this is the optimum time to save and build a hefty cushion that can sustain you when things get rocky.
Build Your Value
A better way of getting through the recession is to make yourself invaluable to your current organisation. Mitul, even when he was fired in 2009, had a couple of job offers for himself right after being laid off because he had skills to offer to the company.
You need to be skilling up continuously because skill is an intrinsic value that you provide. It can be your programming skills, your soft skills or even your network but you need to build your value. Something that others perceive as invaluable and give you an edge above the rest. Be indispensable to your team so that when your superiors have to make a choice, you are not even considered in the list of people who can be laid off.
“One thing that the layoff taught me was that I didn’t know my own value until I was laid off. In the times of recession, getting multiple offers showed me that I had my own value and there were companies willing to pay for it. And that built my confidence.”
Another important aspect of this is knowing your worth. If you have the skills, and ability to deliver, you’ll be able to fight your way through the recession, sooner or later.
Preparing well is the first step to cope with the inevitable recession, but how do you deal with a layoff.
Coping With A Layoff
Well, you could build your worth and you could build your safety net. But coping with a layoff is not easy. We are not talking economically, but also emotionally and mentally. A layoff can be overwhelming and can affect your emotional and mental well-being. While getting back in the industry seems like the obvious solution, before you start job-hunting, you must pause to take care of your mental health. While everyone reacts to a layoff differently, it is important to accept the layoff rationally.
“You must understand that there is a high probability that you are not being laid off because you are not a worthy employee. It’s rather because the company does not have enough to pay your salary and is bound to make a business choice. For instance, when I was laid off, I was working in the sales department of the company. For a business, sales teams are comparatively dispensable when compared to tech or dev teams”, explains Mitul.
Understanding things in perspective and acting accordingly is the first step towards coping with the crisis.
Getting Back In The Game
As Dr Robert Schuller rightly said, “Success is never-ending and failure is never final.” You must not give up. It’s easier said than done, and we understand that. While each person’s journey after a layoff is different, we do have two pieces of advice, from Mitul, for those who wish to restart their career.
Stemming from our previous point, your skills and the value you provide to a team, cannot be ripped off, even after you are laid off. That’s yours. And that’s what you have to keep building. Take courses, read literature related to your field, connect and learn from experts and showcase your learnings on social media, especially Linkedin. This allows you to offer someone more than other candidates apply to the job, cannot.
There are two parts to this. First of all, networking means that you don’t burn your bridges. “Most of Coditas’ clients are from my previous career experiences and relationships. My clients are either my previous companies or my bosses’ companies, wherever they are. When you are laid off, make sure the relationships which you have built over the years, remain intact as they are important.”
Secondly, use your network to help you out. “The day I was laid off, I blasted emails to everyone I knew and I connected with everyone on LinkedIn. I was upfront about it. So folks who are close to me knew about it. I didn’t hide it. There is one thing which everyone should remember here that layoff is not something you should be ashamed of”, recalls Mitul.
It is common knowledge that layoffs are happening during the pandemic. And you’d find a lot of people who are empathetic about it and want to help you. So don’t hesitate to seek help in finding a new job. (If you are looking for software engineering jobs, we can help too. Try Workship!)
These are unprecedented and unpredictable times for all of us. Hope our discussion can help you navigate these circumstances better.