By Essie Bester
From a career perspective, losing your job is certainly one of the worst things that can happen to you, especially if it’s unexpected and not your fault. Your first instinct might possibly be to panic. However, there are active steps you can take to protect your financial position and determine your way ahead, says Gareth Collier, director of the independent financial planning practice Crue Investment in Cape Town.
Here’s what to do:
- Seek legal knowledge as soon as your employer starts retrenchment consultations. The retrenchment process is controlled by the Labour Relations Act and the Basic Conditions of Employment Act, and it is important that the right procedure be followed. An expert in labour relations can advise you regarding your retrenchment benefits in terms of your service contract and legislation. While you are entitled to at least one week’s pay for each year of service, your service contract might make provision for a larger severance package. Apart from your severance compensation, you are also entitled to leave and notice payment, a pro rata portion of any bonuses, commission or incentive benefits and your retirement fund benefits. Your employer must also provide all the documents that may be necessary to facilitate your Unemployment Insurance Fund (UIF) claim.
- Ask advice from a financial expert who can help you to develop a short-term financial strategy that takes into consideration your available emergency financing, severance benefits, life expenses and debt levels.
- Enquire from your employer about you having a continuation option on your life cover. It is important to remain ensured while you are looking at alternative work prospects. A continuation option will allow you to switch your life cover to personal cover if you leave the company, with the benefit that you need not be medically underwritten. Normally you have 60 days’ time after having left a company to exercise your continuation option.
- The retirement fund industry is extremely complex. Find a reliable financial advisor to help you decide what to do with your severance package and retirement benefits. Keep in mind that there will be tax consequences if you choose to withdraw your money. Although capital conservation is always important, your financial circumstances may require that you have to obtain access to a portion of the money.
- Consider downgrading your medical scheme option until your financial circumstances improve. Talk to an expert for the best advice.
- Make sure that your bank and creditors are aware of your retrenchment before your debit orders or instalment payments are refused. If you have a home-loan, you could talk to your bank about a restructuring of the loan, or to decrease your repayments for a period. Check if you have credit life insurance, as many of these policies provide for retrenchments.
- Register your UIF claim as soon as possible – keep in mind that there might be delays. See to it that you have the Section 189 letter from your employer, service certificate and settlement agreement in your possession. You can submit your claim online at www.ufiling.co.za.
- Ask your employer for a reference letter to add to your CV before you leave an organisation. Consider also obtaining testimonials (from colleagues, superiors and clients). Get knowledgeable advice about how to compile a professional CV. Update your LinkedIn profile.
- Visit search engines such as za.indeed.com, PNet.co.za and careers24.com to see what posts are available.
- Be strategic about where you send your CV to, with whom you network and how you market yourself. Do your research about the businesses in which you are interested, and adapt your application to specifically meet their criteria.
- Practise how the interview might proceed. Take care to be prepared and that you can answer the most general interview questions employers ask. Be prepared to answer interview questions as to why you left your previous job.
- Find out what you are worth. You will be questioned about your salary history as well as your salary expectations. Use salary reports such as those offered by PayScale.com to determine what you are worth.
- Take the time to follow up and thank your interviewers in writing as soon as possible after the interview. This could result in you getting a second interview or even a job offer. It also gives you a further opportunity to sell yourself as candidate. Refer to specific things that were raised in the interview and emphasise the way in which your skills and experience would be fitting partners for the position.
- Take your retrenchment personally. Most companies are struggling financially due to the lockdown and retrenchments are on the increase. Try to continue maintaining good relationships with your former employer and colleagues, and let them know if you are available for contract work.
- Sign a settlement agreement before having obtained legal advice. While most employers are ethical, there are those who would try to do you in when it comes to your retrenchment pay-out.
- See your retrenchment benefits as a windfall. Take a long-term view of your retrenchment package and benefits. It could take a few months before you find a new job – get independent advice about these funds and use them wisely.
- Take uncalculated risks. If you intend starting your own enterprise, you have to make sure you have a documented business plan in place that is realistic and feasible. Be wary of investing in a new enterprise, especially if it is in a field of which you carry no knowledge.
- Be taken in by investment fraud. If you have chosen to withdraw some of your retrenchment benefits, you could be tempted to invest in a scheme that promises quick profits.
- Lose hope. It may take longer than you anticipated to find a new job. Plan for a transition period of at least six months.