Worried About Being Downsized? Here’s How to Take Control

Before you get "the call" that your retirement date has been chosen for you, evaluate your options and control your destiny while you continue to contribute value to your company.
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By Chip Munn

The last few months have produced a great deal of uncertainty, for both employees and companies. Everyone is looking for solutions to their most pressing problems, which sometimes means that decisions are made based on how things have historically been done rather than creatively looking for alternative, better solutions.

Chip Munn

Chip Munn

If you’ve worked in a large company for any period of time, you’ve likely seen someone get “the call.” Their boss asks to see them and, after telling them what an asset they’ve been to the company, explains that the company has decided to go in a different direction. While I hate to think that ageism exists, you can’t help but notice that it’s often older employees who have to worry about “the call.” Even worse is when companies marginalize older workers and leave them wondering where they fit. Marginalization has a host of negative consequences that often lead to the employees opting to leave (which is convenient for the company).

Whether they’re given a severance package, are terminated or quit, their career with the company has come to an abrupt end. In addition to taking their belongings with them, they’ll also leave with the company’s greatest asset – their wisdom.

This leaves many employees feeling uneasy and rightly so. The fear of being cast aside after a long career can be disturbing on many levels. Finances may be uncertain if your career has ended earlier than you’d planned. You may have to begin taking social security or pension payments early. Some people tap into their retirement and investment plans early, which can impact the future income that’s available later.

There are also physical and emotional effects of this type of abrupt change. There can be embarrassment and depression, negative impacts on relationships (while the overall divorce rate in the United States is declining, the divorce rate for those over age 50 is growing), and the development of a sedimentary lifestyle can lead to health problems or death at an early age.

So, what do you do if you’re worried that you might be next in line for “the call?” Here are a few steps to help you take control:

What Does Your Ideal Work-Life Look Like?

If you could design your ideal day at work, what would you spend your time doing? If you’re like most people, you’d want to work on projects you’re good at and that you’re passionate about. You may want to work hours different from what a regular 9-to-5 job may offer. For the sake of this exercise, pretend that there are no rules and your day is a blank slate. Write out your vision and ask yourself, “Would this make me excited to go to work for the rest of my career?”

Determine Your Financial Needs Now for Retirement

While it would be nice if economics didn’t matter in these situations, they’re often a big factor in late career decision-making. There are four primary areas to consider when trying to assess your next steps financially: what you have, what you owe, what you make, and what you spend. A financial planner can help you develop a comprehensive plan, but I’d encourage you to focus on what you make and what you spend first. What expenses might change if your work situation changed? Would your budget for clothing or transportation change and, if so, by how much? Do you have income from sources other than work – like Social Security, rental or investment income, or a pension? Based on these numbers, how much do you need to make to bridge the gap between what you will need and what you will spend? This is critical information when talking to the company, because in times like these, they have to be particularly mindful of the bottom line.

Develop Your Transition Plan for When and How You Work

Now that you know how you’d like to spend your day and what you need to make to bridge any gap in your income needs, you can compare them to your current situation. Some of the primary opportunities that you could propose for change would be: modified hours, limited scope of projects, modified salary, change in work status (contract work vs. full-time, salaried employee) and elimination of (or lack of need for) benefits.

Benefits and taxes can easily cost your company 30% or more in addition to your salary. If you are in production, could you work fewer hours on only your favorite projects and accept a lower income? If you’re in sales management, could you relieve yourself of some of the stress and responsibility of overseeing people while still serving as a relationship manager for key accounts a few days a week? Put yourself in the company’s shoes: What obstacles might they see that you can develop solutions for in advance?

You should consider as many opportunities as you can think of and then pick the one that you’d love to have. I’ve worked with a marketing director who didn’t enjoy elements of her job, so she proposed that she work 20 hours per week remotely and only on projects that were in her primary wisdom (where she was experienced and passionate). Her company was glad to work with her, because they valued her expertise. I’ve also seen executives humbly request different roles, lower on the organizational chart, in order to have more flexibility with their time and less responsibility. None of these people wanted to leave their company, they just wanted something different and developed and presented their company with an alternative solution that could work for everyone.

Schedule a meeting with your manager or director of human resources. Armed with this information, proactively request a meeting with your company or department’s decision maker. Explain to them that you’d like to suggest a potential change for their consideration. Unlike “the call,” this meeting is called by you, on your timetable and you have the talking points in advance, rather than the other way around. Be warned, this could be unsettling for management at first, because it’s not what they’re accustomed to and unexpected (similar to the way you’d feel if you got “the call.”)

Review your current position then, describe what your ideal work life would look like and how a transition might be beneficial to the company. During your meeting, walk your supervisor through all of your information. It may seem like you’re interviewing for your perfect job – because you are.

Explain the benefits to your company, such as your ability and willingness to help transition wisdom to the next generation. Explain the potential challenges they might have and potential solutions you’ve developed. You’re inviting your employer to partner with you on the next stage of your career and their next generation of leadership. If there was ever a time to ask for what you’d want, this is it, but be able to back up why it helps the company right now, too. Companies don’t let go of good people because they want to, so you’re giving them a way that they can get what they need (like reduced expenses) while retaining your wisdom and experience.

Be open minded. You’re asking your company to be open to new ideas. It’s likely this conversation will catch them off guard, so be understanding if they don’t say yes right away, or if they come back with some alternative ideas or solutions. Having given thought to your ideal work life, you can entertain any ideas they come up with and, ideally, work collaboratively to develop a win-win for both you and the company.

COVID-19 will cause changes in your company, but you can determine whether they’re happening to you or happening for you. This is a time to be proactive rather than reactive. By following these steps, you can outline an innovative solution that not only helps the company but also shifts you from being worried about becoming unemployed, and into being focused on creating a new job that you love (without having to pack up your desk.) They say that necessity is the mother of all invention, that doesn’t just apply to companies anymore.

About the author: Chip Munn

Chip Munn is a senior wealth advisor and CEO of Signature Wealth Strategies. He is the author of The Retirement Remix: A Modern Solution to an Old School Problem, and host of The Retirement Remix and Maximum Advisor podcasts. For more information, please visit, www.chipmunn.com and connect with him on Twitter, @chip_munn.