Reduced Hours, Paycut - What's Next?

"He reduced my hours and pay. Did anything change with you?"

I was having a pay-cut conversation with my Arizona-based coworker. Her hours were cut from 40 to 35 a week. Mine stayed the same but I have to let go of the bonus part this year and no pay increase as well. I guess we all have to make little sacrifices.

She was considering a second job on the weekends but opted not to take it because of her young children. Changing jobs is out of the question, at least for now, she said. Getting a high paying job will require her to commute. That means more time away from her kids. Plus the expenses associated with commuting e.g. gas, work clothes, etc., will just increase her family’s monthly spending.

California is bankrupt and most businesses if not all, are taking the hit. Even though insurance is one product that Americans cannot give up easily because of the consequences of not being insured and non-compliance with state requirements, people are still finding ways to reduce insurance costs. They shop for cheaper rates, go direct with carriers, reduce coverage and increase deductibles to save on premiums.

There are companies who are worse off and have resorted to layoffs and furloughs. People are taking second jobs. That is if there are second jobs jobs available.

The New York Times reported that unemployment was up in June, shedding off 467,000 jobs, the highest in 26 years. I don’t know when things will start improving. I cannot even assure myself of the job I have held for over two years even though my boss tells me that my job is safe. When the boss needs to make tough calls, then that’s it for me.

Anyway, I can’t just sit around and wait for things to unfold before my eyes. I try to save much, spend less on the non-essentials and work on additional projects that fit my schedule.

Stimulus package and the lack thereof

If you're one of those unfortunate people who didn't receive any "stimulus" package (read: salary increase) this year, be thankful, stop whining and carry on with your work. You're still employed, that's the most important thing now. Plus, if you look at the brighter side of things, I think no stimulus package is better than pay cuts and furloughs.

Tough times or not, it's advisable to be frugal and at the same time, come up with ideas to bump up your income. Inflation knows no recession so keep beefing up your savings and spend only on the needs.

The job market may look bleak this year especially if you're in the hard-hit sector of manufacturing, banking and construction but that doesn't mean the world is over. You can either try working in a different industry or try setting up your own business. I know it's easier said than done especially if you have financial obligations and mounting debts to deal with. However, facing the issues is lot better than running away from the problems.

Your choice.

Employed during the recession

Microsoft is slashing 5,000 jobs this year. Intel is following suit by reducing the workforce by 6,000. Google’s quarterly profits are down for the first time. Sony lost billions in profits last year, layoffs loom. Pay freezes, job losses, people queuing up unemployment benefits and list goes on and on.

Everybody feels the huge impact of the recession. Employees who belong to non-recession proof industries are hanging on tightly to their dear jobs. Careers in health care, education and government services are still okay. Nurses and teachers are still very much in demand especially in the U.S. Finance jobs, on the other hand, are borderline. Accountants, insurance professionals, among others are considered relatively safe. However, it is best not be complacent about your current employment. Brush up on your skills, attend advance courses and specialize because you wouldn’t know the shelf-life of your current job. Plus, outsourcing awaits, just waiting for the right opportunity.

Outsourcing, as we are all aware of, creates and takes away jobs. For the countries who provide outsourcing services, jobs are created for their locals. As for the companies who ship jobs overseas, it’s their fellowmen who suffer on the other spectrum of the business equation, for jobs are lost or made obsolete. It’s a fact that some jobs once innate to a particular country will soon be history because of globalization.

So, if you’re still employed, what do you do to keep your job during recession?

Different situations call for different actions. Personally, I employ the following in my career:

1. Work harder than I used to.
This means taking in more responsibilities outside my job description. This may as well justify a raise or a promotion BUT if things look bleak in your company, better forego of the thought. At least temporarily.

2. Get another skill.
A recession-proof skill, to be exact. I am thinking of going back to school. I know, it’s an additional expense at this very inopportune time BUT the operative word here is “recession-proof”. Consider the further studies as an investment. You may have to tighten your belts a bit more to get this goal done. Think long term.

3. Network.
Touch base with former co-workers and bosses. You’ll never know when they need your services again.

4. Establish a business.
Consider building an offline or online business. Working for oneself is better than working for someone else. You own your time; you bring home all your profits. It’s true that you’ll have to put in more hours of work to build your business but that’s how every business owner starts.

The economic downturn is all part of the business cycle. It has its ups and downs. In our personal careers, it’s a test of tenacity and endurance. A test of how much more we can take.

Having said all these, the Pollyanna in me is still optimistic that the situation will improve. The U.S. has a new president and he promised the big change. A change that will hopefully spillover its benefits overseas.

Christmas after the crunch

When employers are faced with budget concerns, especially at this time of the year, expect that Christmas giveaways and expenses will be cut.

When the financial crisis hit the global economy, ancillary expenses like free soda, milk chocolate and other pantry freebies are the first to go. It happened to us. But we can live without those free amenities. I’d rather see the free soda go than find myself jobless.

Amidst the corporate penny-pinching left and right, the outsourcing industry continues to thrive. Surely, there are certain accounts that were lost (not ours) as a result of the bankruptcy of major American financial institutions but there are industries that continue to thrive despite the financial crisis.

According to a ranking done by a career website called Jobfox.com, a career in sales, nursing and accounting are considered recession-proof jobs. In the same fashion, the healthcare sector and other industries that support their business are considered recession-proof as well.

Now, what do you do if your job is not recession-proof? Keeping oneself ahead of the pack in terms of skills would certainly give one an edge over the others. But also, it is important not be complacent about the situation either. Learn a new skill and always be in touch with your network for possible opportunities.