Introduction
Job security is crucial for career advancement and financial stability.
Research shows that layoffs are associated with subsequent future unemployment, enduring earnings setbacks, and diminished job quality. These repercussions can have a lasting impact on your financial stability and career trajectory (NCBI).
Additionally, layoffs have severe personal consequences. Studies suggest they can significantly increase the risk of depression, particularly among men (NCBI).
Given these substantial risks, let’s avoid them as much as we can, shall we?
To that end, it’s crucial to take proactive steps to avoid being laid off.
In this article, we will explore practical strategies to enhance your job security and ensure you remain an indispensable asset to your organization.
Understand Your Company’s Health
We’ve previously detailed how to detect signs of impending layoffs in our article Deciphering the Signs: Are Layoffs Coming?.
For the purposes of this article, let’s assume you already know layoffs are coming and have a few weeks, maybe even a few months to prepare. Here’s how you can use this critical time effectively.
Before We Get Started
The internet is filled with horrible advice on how to avoid getting laid off. Most of it is not sound or effective. At best, this type of advice will clutter is your thinking. At worse, it will put your job at jeopardy.
Here are some commonly suggested strategies that can actually backfire – let’s make sure you are avoiding them:
Bad Advice: Being Likable and Socially Connected
Relying solely on your social connections to protect your job is misguided. Layoff decisions are typically based on financial necessity and strategic reasons, not personal relationships (except for the few relationships with key decision makers we will discuss below). Companies prioritize performance and value over likability and relationships get quickly disregarded when those layoffs take place.
Bad Advice: Volunteering for Larger Company Projects
Taking on large, high-profile projects may seem like a way to demonstrate your commitment, but it can backfire if these projects fail or face delays. Besides, when it comes to job security, it’s not about the size of the project, but about the visibility of the project.
Bad Advice: Sharing Your Skills with Others
Training your colleagues might seem like a way to showcase leadership and teamwork, but it can actually diminish your unique value to the company. If everyone can do what you do, your position becomes less secure.
Now that you are starting to get a sense of what not to do, let’s delve into understanding why layoffs happen.
Why Layoffs Happen
Layoffs are not just random or purely performance-based; they are deeply rooted in the fundamental nature of how corporations operate.
The Corporate Machine
Corporations are designed to be machines that convert human resources into capital, period.
This is maximized when roles within the corporation are standardized and easily replaceable. In this process, the corporation’s value lies in its ability to operate smoothly regardless of individual contributions. If a corporation cannot do this, it is not a real corporation, but instead, it is a cooperative.
Remember: the function of the corporation is to make people replaceable. That’s why we trade corporate stocks, not people stocks.
Persistence Over Individuals
You may be a unique individual, but your role isn’t. When financial pressures mount, strategic shifts occur, and the push comes to shove, the corporation prioritizes its survival and profitability over maintaining specific employees.
Here are some common reasons why layoffs happen:
- Financial Challenges: By far, this is the top reason for layoffs. Economic downturns, decreased revenue, or increased costs can lead to layoffs as companies cut expenses to stay afloat.
- Mergers and Acquisitions: When companies merge or are acquired, redundant roles are often eliminated to streamline operations.
- Technological Advancements: Automation and new technologies can make certain roles obsolete, leading to layoffs. (Hint: we are about to see a LOT more of this)
- Strategic Changes: Companies may shift their focus to new markets or products, which can result in layoffs in areas that are no longer a priority.
- Individual Performance Issues: While less common than the reasons above, individual performance issues can also lead to layoffs, particularly if the employee’s role is seen as non-critical. Some companies have rolling or annual layoffs where they get rid of their bottom 10% – used to be a more common practice before our labor shortage…
As you can see, except for the last one, layoffs are independent of the individuals being laid off.
This is why, understanding that layoffs are a systemic issue rather than a personal failure is useful. This perspective enables you to approach job security from a broader perspective, focusing on making yourself indispensable within the corporate machine while staying adaptable to its changing needs.
How Employees Are Selected for Layoffs
Now that you know why layoffs happen, we also need to understand how people are picked during layoffs. Here’s how the selection process typically works (not in any particular order):
Seniority
Seniority often plays a significant role in layoff decisions. Companies may prioritize retaining employees who have been with the organization the longest, under the assumption that their experience and loyalty contribute to stability. (Sometimes it does, sometimes it doesn’t)
It’s crucial that you understand this has nothing to do with loyalty and everything to do with the ability of senior employees to contribute greater value to the corporation.
Employee Status
Temporary or contract workers are usually the first to go, as they often have less job security and no severance agreements. Permanent employees with comprehensive severance contracts or union protections might be more secure, but this can vary depending on the company’s financial health and strategic goals.
Merit-Based Selection
Merit-based selection focuses on historical performance, rather than an objective measure of merit (since such a thing does not exist). Employees who have consistently met or exceeded performance targets, assuming they have this documented in their performance reviews, are typically seen as valuable assets and are more likely to be retained.
Skills-Based Selection
Sometimes they evaluate employees based on their skill sets and how these align with the company’s future needs. Employees with specialized skills or those proficient in critical technologies are often prioritized for retention, out of sheer necessity.
Top 6 Reasons Why Specific People Get Laid Off
Now that you know how employees group people for layoffs, you also need to understand why specific individuals are chosen for layoffs. This can help you take proactive steps to avoid being targeted. Here are the top six reasons why individuals get targeted for layoffs:
1. Low Performance
A layoff is a great excuse to get rid of low performers without having to fire them and deal with the legal repercussions. Employees who consistently fail to meet performance targets or contribute significantly to the team’s success – especially if this is documented in performance reviews – are prime candidates for layoffs.
2. Skills Mismatch
Employees whose skills are no longer aligned with the company’s needs are frequently laid off. Workers who have not kept up with changes or who possess skills that are now obsolete may find themselves at greater risk. For instance, if a company shifts their tech stack, employees proficient in legacy systems like COBOL or mainframe computing, might be laid off in favor of those with current, relevant expertise in cloud computing, data analytics, or cybersecurity.
3. Role Redundancy
When companies merge or undergo significant restructuring, roles that were previously necessary often become redundant. Employees whose positions are duplicated or no longer needed are often laid off. This can also occur when a company decides to outsource.
Keep in mind, organizations will try to retain their “unicorns” as well as their high-value talent even if their roles become redundant.
4. Scapegoating
In some cases, management may use layoffs as a way to deflect blame for poor performance or strategic missteps. By laying off specific individuals or departments, they can create the appearance of taking decisive action to address issues without addressing underlying systemic problems.
5. Cost-Cutting at the Expense of Talent
In a purely bottom-line-focused approach, companies may prioritize short-term cost savings over retaining valuable talent. This can lead to layoffs of highly skilled or experienced employees simply because they command higher salaries or benefits.
This type of “cost cutting by any means necessary” is a particular risk if third party consultants are involved with the layoffs.
6. Petty Reasons
On top of these common reasons, there can be unprofessional or even illegal reasons behind why specific individuals get laid off. Age discrimination, despite being illegal, targets older employees, while justifying this as a side effect of older workers being expensive. Personal vendettas or office politics can also drive layoff decisions, especially targeting employees who have clashed with management, or those who are perceived as threats to certain individuals or factions within the company.
By understanding these reasons, you can develop clear perception and a sober attitude toward how corporations operate.
Now… You have a more clear idea of how corporations really operate.
Which also means, now you can position yourself within your company to avoid layoffs.
Your 3 Step Defense Strategy to Avoid Being Laid Off
If layoffs are right at your doorstep, there is very little you can do to prevent them. But there are quite a few actions you can take during your employment, and even more at the start of your employment, in order to make you “layoff proof”.
We teach our students to follow this simple 3-step defense strategy:
- Leverage: Build leverage by cultivating power in your favor within the organization. This involves strategically positioning yourself as an indispensable asset, whether through unique skills, valuable connections, or critical contributions. The more leverage you have, the less likely you are to be targeted during layoffs.
- Value: Tangible results and measurable value you give your organization matters. Consistently exceeding expectations – in a visible, documented manner – and delivering high-quality work increases your perceived value and reduces the likelihood of being targeted for layoffs.
- Relationship: Strong relationships with supervisors and key decision-makers within the organization also matters. Humans are incapable of turning off their emotions or making purely logical decisions, and decision makers are always under the influence of their relationships.
Let’s go through each of the steps in detail…
Building & Using Leverage
The essence of this strategy is to make it more expensive for the company to lay you off, in terms of both fiscal outcomes for the firm, as well as for personal outcomes for the decision makers.
It’s the porcupine strategy: a predator might still be able to get you, but it will also suffer excruciating and lasting consequences.
Severance Contracts (Golden Parachutes)
Negotiate for severance contracts (or golden parachutes) as part of your employment agreement. These provisions ensure that in the event of a layoff, you receive financial compensation or benefits beyond standard severance packages. These have no limits and can cover multiple quarters, or even years worth of salary. This increases the cost for the company to terminate your employment, making you less of a target for layoffs.
Specific Credentials & Skills
Ensure you possess specific credentials and skills that the company has invested in or relies on. For example, if the company has sponsored your advanced training in a specialized software program crucial to its operations, or if you are their only legal council and they need one, you become less expendable.
Position Yourself as Indispensable
Focus on tasks and projects that are directly tied to revenue or critical to the company’s operation. The closer you are to revenue generation, the more indispensable you become. Volunteer for projects that get your foot in the door of these projects if necessary.
Developing Unique Expertise
Become an expert in a niche or specialized area critical to the company’s success. This could involve mastering specific skills, knowledge, work policies, processes or even relationships relevant to the company (clients, partners, allies, etc). For example, if you work for a technology company, becoming a certified expert in security that helps them meet certain processes, such as PCI DSS compliance standards, could make you indispensable.
Remember – this is the essence of leverage: If their business fails without you there, they can’t lay you off.
By implementing these strategies, you can build leverage within the organization, making it more expensive and less desirable for them to lay you off.
Creating & Controlling Value
Next to leverage, the second best thing you can do to avoid layoffs is “creating and controlling value”. Here’s how you can achieve this:
Increase Your Value to the Company
There’s a lot you can do to increase your value to a company…
At its core this is about becoming “the solutions guy”: Get things done, and get them done fast. Get them done well. And get more done.
For instance: Pursue certifications and training in areas critical to your company. Implement efficient work practices to maximize your output. Exceed objective and measurable performance goals to demonstrate your ability to deliver results. Volunteer for high-impact, high-visibility projects and proactively solve problems. Step up to challenges and establish yourself as a proactive problem solver.
Increase Visibility
The amount of value you create is meaningless unless the right people know it. You need to make your value extremely visible in today’s corporate world.
Document your achievements. Keep track of your accomplishments and contributions, and regularly update your manager and team on your progress – even when it seems unnecessary. Participate in company meetings and forums, and share insights and ideas whenever possible to increase your visibility and showcase your expertise, especially if key decision-makers are watching.
Every chance you get, you need to show your value. It’s not enough to be valuable; you must also be perceived as valuable, especially by individuals who make hiring and firing decisions.
Whether you work remotely or in the office, make an effort to be visible to those who have the authority to influence your employment status.
Control of Value
While creation of value and the visibility of that creation is incredibly important (especially for rank and file workers), control of value is where the game is really played.
Not every professional has the opportunity to control value in their organization. But if you get a chance to do so, you need to take advantage of it.
At a minimum, it’s important that you are viewed as a leader, and someone who leads key initiatives. Take ownership of critical projects or initiatives that directly contribute to the company’s success. By leading these efforts, you control the narrative and demonstrate your ability to drive positive outcomes.
Next, build strategic dependencies. If key stakeholders, including senior leadership and decision-makers, rely on you or your relationships for their own success, you will become indispensable. By establishing yourself as a crucial, trusted advisor and a key collaborator, you gain influence and control over your value within the organization.
Finally, actively campaign for a seat in decision-making circles within the company. Network strategically with key stakeholders and decision-makers, and position yourself as “not only essential to day-to-day operations”, but also “influential in shaping strategic direction”. By embedding yourself within these circles, you gain insider knowledge and influence over decisions, making it nearly impossible for the company to consider laying you off without jeopardizing critical initiatives or strategic goals.
Strengthen Professional Relationships
After leverage and value, the third pillar of our strategy is relationships. Here’s how you can strengthen your relationships to improve your job security:
Build Strong Internal Networks
Cultivate relationships with key decision-makers. These individuals can include supervisors, department heads, and executives who have the authority to influence hiring and firing decisions. By establishing rapport and demonstrating your value to these stakeholders, you increase your visibility and credibility within the company.
Build External Networks Vital to Your Company
Expand your professional network by connecting externally with groups or individuals that are important for achieving the objectives of your company. Attend company events, industry conferences, and networking events to connect with colleagues, peers, and professionals in your field. If you become the person that connects your company to a specific network or vendor, it may be too costly for your employer to let you go.
Enhance Team Collaboration
Being a team player and helping colleagues is a positive, win-win interaction, especially as far as your relationships are concerned. By being a reliable and supportive team member, you strengthen relationships and build trust among your peers.
Lead by example by embodying the values of professionalism, integrity, and accountability in your interactions with others. If you are an exemplary employee that everyone respects, letting you go can be extremely detrimental to morale.
Remember: by focusing on building strong professional relationships, you not only enhance your job security but also create a supportive network that can offer guidance, opportunities, and career advancement in the long run.
Combined with strategies for increasing your value, visibility, and leverage, strengthening professional relationships can turn you into an indispensable asset to your company. And becoming an indispensable asset to your company is one of your core responsibilities as a high value professional.
Remember this: Just as much as the corporation’s job is to make you replaceable to protect shareholder value, your job is to become an indispensable beacon of value, relationships and leverage that a company cannot do without.
Fourth Secret Step: Adapt to Change
Beyond these material actions we’ve recommended above, there’s also a little bit of an attitude shift, that can pay immense dividends toward your job security.
Be adaptable.
Adapting to change is crucial for maintaining job security and thriving in a competitive work environment, especially considering the amount of automation, technological disruption, and de-globalization we are experiencing.
Here’s how you can embrace change in order to increase your job security:
Being Flexible
Embrace new roles and responsibilities. Be flexible in adapting to evolving job requirements and expectations, and demonstrate your willingness to step outside your comfort zone. This not only makes you more resilient, but also positions you as more valuable.
By adapting to organizational changes with ease and without resistance, you can also provide a level of psychic comfort to decision makers. Remain adaptable and resilient in the face of uncertainty, so that they draw comfort from your comfort and grow to depend on your presence.
Continuous Learning
We assume all our students and members are engaged in lifelong learning and professional development – so this is justs a minor reminder…
Continuous learning and skill development is no longer optional. You need to be evolving yearly, monthly even weekly – in order to stay relevant and competitive in the modern corporate world.
Seeking Feedback
While you can achieve quite a lot on your own, you can never uncover and deal with your blind spots – perhaps your biggest vulnerability.
It is imperative that you regularly seek feedback and constructive criticism – from qualified people whose opinions and guidance matters.
Keep in mind, we’re not saying “be open to feedback from anyone”. But be receptive to feedback from successful colleagues, leaders who hold power in your organization, as well as mentors. Learn to put your personality and ego aside when receiving feedback, and use that feedback as a tool for personal and professional growth. (See our events)
By embracing change, remaining flexible, and committing to continuous learning and improvement, you position yourself as a valuable asset to any company. Adaptation ensures that even as your position transforms, you retain your job security and continue to thrive.
Conclusion
While the steps provided in this article will give you a significant competitive advantage over your colleagues, it’s essential to acknowledge that even after taking all of these actions, you may not be able to avert a layoff.
At the end of the day, if the company is facing financial difficulties and cannot sustain its workforce, there may be little you can do to prevent a layoff. Moreover, it may not even be to your advantage to stick around!
In such circumstances, it’s crucial you prioritize your own financial stability and well-being.
Therefore, while deploying these tactics is highly recommended, they should be secondary to building your professional network and remaining highly employable. Maintain an updated resume, build your personal brand, take relevant courses, attend industry events as well as career development events, and continuously develop highly sought-after career skills.
Career uncertainty is a fact of life. Layoffs happen. So what….
By focusing on enhancing your own employ-ability and continuously investing in your skills and personal development – you can become immune to layoffs.
And you can navigate the challenges of our economy, and emerge even stronger than before.
Even when your employer doesn’t, there are those of us – we’ve got your back…