Preparing for a lay off...

[Aquedita]

Please help!

I am 25 years old and currently work in Poznań (Poland) as a Customer Service Representative. Just got the news that the company I am employed at will be relocating and they will be closing my department on December 6 2012. While the company is willing to compensate us and offer some options (extra training, severance package and so on) the details are still unclear. My question is: how do I prepare for such a situation? What should be my priority?

1)Building up an emergency fund? At the moment I have around 2500 PLN saved up (plus retirement and investment accounts).
2)Paying off credit card debt aggressively? At the moment I owe about 5500 PLN. I have my mind set on transferring the balance to benefit from a lower %.

Based on the supposedly solid position of the company, I made a decision to go back to school last year to pursue some weekend classes in Spanish. I love it but it costs over 4300 PLN per year. I am not willing to relocate for a better employment opportunity because I am happy with my friends, apartment, wish to continue the studies and simply like my city.

At the moment my basic monthly salary is about 2000 PLN after taxes and health insurance, with overtime and occasional small bonuses paid extra. The absolute bare minimum for the monthly expenses is an estimate of 1200 PLN. Apart of that, there are the credit card payments, tuition, student loans from my first studies. I try to save up and I am putting cash aside for retirement, small emergency fund and so on.

This summer I am planning to do a TEFL certificate, this is something I wanted to do for a long time now. The cost will be around 2000 PLN due to bad exchange rate of my national currency... I would love to get some experience as a teacher in the autumn before I finish my job officially, even if it means wiping out my savings.

I am a bit terrified that almost 300 people will be searching for a job at the same time in the same place and I assume we will all apply to the same companies. I wanna stay until the end for the benefits, but I'm not sure what is the best solution...

Any ideas?

[disneysteve]

Welcome. Sorry about your impending job loss.

I would absolutely cut your expenses to the bare minimum and build up your cash savings. You have a 2 month emergency fund which is a good start but you should really work on getting that up to 6 months or more.

I would not accelerate the debt payments but if you can transfer to a lower interest rate, I would do that.

You are right to be worried about 300 people searching for similar jobs all at once. Because of that, I'd start looking NOW. Don't hang on to the end just for the benefits if the trade off is not being able to get another job in the area. Look at the long term, not the short term.

[Aquedita]

Dear disneysteve,

Thank you for your kind words and taking the time to reply to my message. Pleased to meet you!

I will definitely set up a savings plan. Deep down I realize what is the right thing to do, I am just shocked and scared right now. I do have some ideas where to apply but no particular leads just yet.

The most demotivating thing is that my favorite coworker (now my flatmate) was laid off about 2 months ago and still he did not find any other job. I did observe his journey and it is not a pretty picture.
It is very stressful to realize that for the next 6 months every time I come to work I will wonder are my logins still active or will they work just for one more day. The funny thing is that I never liked the job or the company...

Just had to put my thoughts in writing I guess...

[snafu]

I think I read unemployment in Poland was more than 12%. What percentage of your income do you get in unemployment benefits and how many weeks of benefits will you qualify for? What is the GDP? If you proceed with the plan you began when you believed your employment was secure, how will you support yourself if unemployed in 2013?

What jobs can you fill with your current skills and education? Here most jobs are never advertised. Openings are mostly filled by word-of-mouth because an employee recommends a qualified candidate. It's important to build a big a network to help you find another job. The research suggests the longer an individual is unemployed, the more effort it takes to acquire employment.

The general advice is to polish resumes and apply for any job you're qualified. Limit spending to basic needs. Cut back every category, avoid bars and restaurants which add at least 30% to costs. don't use credit cards. Take lunch and coffee to work. Hoard cash, pay only minimum payments to creditors to preserve credit rating until you get another job. Do anything possible to generate more income like a part time job in addition to current work, take in a room mate and sell stuff you don't need. Start mentally preparing to move in case you can't pay the rent. If you have any retirement savings, understand the penalties and taxes can be as high as 50%.

[Aquedita]

Thank you so much Snafu for such a detailed and thought provoking post!

I think I read unemployment in Poland was more than 12%.

I am aware that in my city it is always harder to get a job in the fall when the summer gigs come to end and college students, who are willing to work for less, come back to town.

What percentage of your income do you get in unemployment benefits and how many weeks of benefits will you qualify for?

I know I will qualify for some kind of - let's call it - social security coverage. It could be as low as 40% of my current take home pay so it would hurt bad. I don't believe there is a limit of weeks for that though so it is a guarantee. I sincerely hope my employer will somehow compensate us since I could use that extra money as a cushion.

If you proceed with the plan you began when you believed your employment was secure, how will you support yourself if unemployed in 2013?

Worse comes to worse, I will put Spanish classes on hold or minimize them. Obviously, it's not a perfect solution. What I will fight for is my employer covering my TEFL course I mentioned above as I will argue they owe it to me to help me acquire new skills.

Should it prove not possible, my parents could help out with the training as they do understand it is an investment in my education. I would pay them back later of course.

What jobs can you fill with your current skills and education? Here most jobs are never advertised. Openings are mostly filled by word-of-mouth because an employee recommends a qualified candidate. It's important to build a big a network to help you find another job. The research suggests the longer an individual is unemployed, the more effort it takes to acquire employment. The general advice is to polish resumes and apply for any job you're qualified.

Luckily I've been blessed and my education is quite strong and recent work experience speaks in my advantage. It is true that I improved some handy skills with my current employer, for which I am grateful. I will start with applying to companies that I would like to work for in the first place.

Limit spending to basic needs. Cut back every category, avoid bars and restaurants which add at least 30% to costs. don't use credit cards. Take lunch and coffee to work. Hoard cash, pay only minimum payments to creditors to preserve credit rating until you get another job.

These were exactly my first thoughts! Extra frugal style all the way. I will double check each expense and keep my eye on every way to save up! I'm kind of doing a list of things to cut down on or to eliminate at all.

Do anything possible to generate more income like a part time job in addition to current work, take in a room mate and sell stuff you don't need.

My best bet is taking quite a LOT of overtime as it pays well (up to 200% regular pay+incentives on special occasions). Naturally, I will consider all of these options. Once I do my certification, I would like to get into teaching asap.

If you have any retirement savings, understand the penalties and taxes can be as high as 50%.

I would never ever consider taking out retirement money, not an option at all. What I could do is liquidate my investment account. It does not incur penalties but as far as I remember currently the portfolio is not in the best shape so it's probably not a fantastic move.

So grateful I joined this forum!

[bennkar]

As someone (from the USA) that lived for a time in Europe, but not in Poland, I saw this type of situation during my time there. I base that on your comment of not wanting to move because you are "happy with my friends, apartment, wish to continue the studies and simply like my city". In Europe the common mentality is once you are settled someplace you never leave no matter what. That's all fine and dandy if your job never goes away. But if it does go away, you need to be willing to accept if you stay that you may no longer be able to live on your own, buy things you want, or have a decent standard of living.

All the advice given here has been good, but if you refuse to look elsewhere "you're going into this fight with one arm tied behind your back". In America we have a saying "Fortune favors the bold". Be bold, look elsewhere, you may be happily surprised with what you find.

[snafu]

What is driving your desire to become proficient in Spanish? Is there a lot of demand for Spanish in the business community? I presume you have a TOEFL score in excess of 600. Have you considered tutoring English for both added income and teaching experience?

Have you investigated the salary grid for TEFL teachers? A lot of teachers are looking for ways to get into another career as the off the grid work and hostile parents have combined to make their days miserable. Do you have Mandarin language skills? Are businesses in Poland anxious to do business in PR China?

What are your career goals? Do your have targets for the next 5 years?

[Aquedita]

In America we have a saying "Fortune favors the bold". Be bold, look elsewhere, you may be happily surprised with what you find.

Thank you for your concern Bennyhoff.
Trust me, I am not timid and I love to explore the world. I used to do summer jobs abroad in different countries, different cultures and languages and loved it. One of the reasons why I insist on pursuing TEFLing. I am fully aware of the disadvantages and pitfalls for sure, I did my research before committing.
The thing is that at the point in my life I need to stay put because my support network will move to my city quite soon and I want to take full advantage of that before we all go our separate ways. Also, I don't wanna leave my fantastic church community.

What is driving your desire to become proficient in Spanish? Is there a lot of demand for Spanish in the business community?

Dear Snafu,
to be perfectly honest Spanish is more of a passion and a dream than a necessity. I see it more like a hobby, just like yoga.

Have you considered tutoring English for both added income and teaching experience?

I do have a little experience in private tutoring to children and young adults back from my college days. I could get back to that quite easily.

What are your career goals? Do your have targets for the next 5 years?

I hear you and that you for bringing things into perspective. You are totally right, I need to focus on the bigger perspective.
Since traveling and languages are my passions, I wanna develop my skills in that field. I do have a tour guide license which might become handy, but not necessary. I need to do some kind of a road map and set my priorities straight I guess.

Thank you guys for all your input, I appreciate it!

[Aquedita]

Accidentally, today I read this interview with Lynda Gratton (the author of "The future of work is already here") who makes in interesting point. She preaches that we should all create a job for ourselves is we are not happy with our current position in order not to WORK AS somebody but TO BE somebody and identify with the particular profession. So instead of saying: "I currently work as a Customer Service Representative" I should say "I am a teacher so I will pursue this path". Thoughts?