Dealing with job loss

Apr 17, 2023

Involuntary job loss is traumatic and painful, with its impact coursing through our emotional, social, professional, and financial lives.

There are two dominant coping strategies that individuals resort to when coping with the shock.

  • Problem-focused coping strategies work to remove or fix the source of the discomfort.
  • Emotion-focused coping strategies work to avoid, transform, or dull emotional pain.

Both strategies are useful to some extent, but different circumstances call for different strategies to bring about the best outcome. For example, if a thorn in your foot is causing pain, a problem-focused strategy (removing the thorn) would be the best course of action. If the pain is from stitches, the best approach is to avoid, dull, or ignore it while you heal.

Emotion-focused coping includes distancing yourself psychologically from the source of discomfort, minimizing or discounting the pain or its source, distracting attention away from the pain or its source, and positive reappraisal of the situation. Investors often must use emotion-focused strategies to dull, distance, or ignore the discomfort of market volatility and investment losses. In these instances, an emotion-focused strategy can be the adaptive, optimal response because ill-timed action can lead to costly mistakes.

Here's how to ride the storm:

REFRAME job loss positively.

Losing a job can cause intense negative emotions: anger, confusion, grief, sadness, and fear, to name a few. The research I reviewed suggests that the most effective emotional coping tool, in this case, is positive reappraisal—reframing the events in a positive light to reduce the pain and intensity of negative emotions.

One group of researchers noted that people who respond pessimistically to a layoff have little psychological energy left to pursue problem-focused strategies. Positive reappraisal may be especially useful because, rather than depleting mental resources through distraction and distancing efforts, reappraisal countervails negative emotions with positive ones.

While writing this, I spoke to several people who had recently been through layoffs. All of them employed positive reappraisal strategies. Several of them talked about how the layoff was good for them because they had been comfortable in their roles but not truly thriving. The shock forced them to reassess their priorities, leading them to seek out positions that better align with their life goals.

A layoff or job loss can be a catapult to greater job and life satisfaction.

Forced change is difficult, and many of us would consider a layoff to be a serious personal and/or economic crisis. Still, if we must face a crisis, resilience is the goal. That means bouncing back, and if possible, bouncing back to a better situation than the one we left behind.

Part of taking back control of our emotional health also involves letting go. If you are struggling to reframe it, give yourself time to grieve. Feeling and processing the loss (and the unfairness of it all) is important so that unresolved fear or resentment doesn’t negatively affect future decisions.

PRACTICAL ways to bounce back.

Positive reappraisal works by creating a more tolerable emotional response to the situation, which frees up psychological resources to put toward problem-focused strategies. Laid-off workers who favour a problem-focused approach to unemployment are more likely to be happily re-employed a few months later.

Problem-focused coping is action-oriented. In the case of job loss, it could take the form of:

  1. Resume building
  2. Proactive job searching
  3. Skill appraisals and training
  4. Professional networking
  5. Cash flow adjustments

A problem-focused strategy makes use of available resources to address the source of the problem. These resources, according to psychologists who study job loss, fall into three categories.

UTILIZE financial resources.

When facing no cash flow by way of salary, inflation continuing the erode the value of money, a volatile market, and fears of recession – the impact can be frightening.

Those who have an Emergency Fund will likely suffer less psychological and economic pain during a period of unemployment. Cut down on all frivolous expenses, even if you have a substantial Emergency Fund. Take a good look at your portfolio and decide what you may have to sell should you be in dire need. Borrowing to solve cash flow issues should be a last resort, not a first line of defense.

BUILD self-esteem.

A positive view of the self is an important psychological resource at any time, and it is critical when we face challenges. Unfortunately, being let go by an employer can severely damage people’s self-esteem, especially if their job plays a large role in their sense of identity or if they suspect their own failings to be the cause.

Revamping your resume can be a confidence boost, especially if it’s been a while since you laid out your accumulated experience, accomplishments, and skills. Everyone I spoke with on the subject reported that being laid off was a blow to their self-esteem. However, once they reappraised the situation, they were able to focus on their strengths, assets, and the value they bring to the workplace, which boosted confidence and helped them muster the energy to be proactive. This will, of course, be easier for some than others.

DRAW strength from social support.

Take the support friends, family, pets, colleagues, professional acquaintances, or any other social network. The quality of the social support is more important than the quantity.

Social support helps bolster self-esteem when it starts to wane since it can keep us connected to our sense of identity and belonging when those feel threatened. Social connections also help open doors to opportunities and partnerships. In some cases, social connection can double as financial or economic support. Spouses, roommates, partners, and friends create a kind of safety net when money is tight.

Job loss can damage our sense of social support, especially if most of our social connections are related to work. Building up a diverse set of social connections, actively networking, and maintaining professional and casual relationships in good times can help you in times of need.

Professional networks can be a major source of social support. Colleagues, LinkedIn connections, and many others can reach out with words of encouragement and leads for new opportunities.

Whether or not you actually experience a layoff, develop a plan before the crisis hits.

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