In the Great Recession I was reduced to part time with a 20% pay cut in October 2010. I started looking for another position during that time, but also knew I could wait a bit. I not only lost my identity as a full time professional and my worth based on compensation, I was no longer the primary earner in my household for the first time in more than a decade. I was crushed by the financial implications as well as trying to sort out my value as a person. In August 2011 I was laid off. While the economy was starting to recover there was a lag in impact for those of us who were consultants to governments. Declining tax receipts and government spending lag in recession so it was late when I, and others in my firm, lost our jobs one at a time. While I was able to secure work within a month my income will never recover and neither will our savings. So even a “mild” impact to work can have lasting effects.
Hundreds of thousands of people in the US have experienced job loss in the past month. How we talk about job loss matters. It matters for the employment future of those people, but more importantly for their mental health. Let’s unpack a few terms around job loss.
Furloughed: Those employees who have been furloughed still have a relationship with their employer. They are without work and compensation at the time, but they expect to be called back to work and the company expects to recall them. Of course, there is no guarantee. Employees who are furloughed are generally not looking for new employment because they expect to be called back. They may struggle with financial uncertainty and the uncertainty of employment return or how to use the extra time.
Laid off/Reduction in Force: Employees who are laid off because their position isn’t needed due to reorganization, changed corporate priorities, or shifts in business practices are part of a reduction in force. These layoffs may involve a small number of people (generally when they are executive or management/senior staff level) or may be mass layoffs. These workers no longer have a relationship with their employer. They are generally going to be looking for a new position with a new employer. Feelings of loss and grief, including questioning one’s self-worth can be common. They are eligible for unemployment insurance.
Fired/Terminated for Cause: When employees are fired, it is because they have failed to meet performance expectations or have violated corporate policies. These still happen during the economic recessions. In some cases they may be related to the stress of the recession and how some people (employees or managers) are processing the stress and the amount of grace extended. In any case those who are fired or terminated for cause do not have a relationship with their employer. They may face significant mental health challenges processing the loss and may find it hard to secure new employment depending on the cause of the termination. They also may be denied unemployment insurance.
When media say “thousands fired” and such they are doing a disservice to those people and may be triggering a range of negative emotions. People are not fired en mass. They are part of a reduction in force and have been laid off. Valuing people for who they are rather than their employment status is very important to maintaining the mental health of those people.
There are also may people who have been shifted from full time to part time with a reduction in pay and some that have taken a reduction in pay without a commensurate reduction in hours. Both are still difficult. Income is reduced faster than expenses can generally be reduced and people may struggle with the loss of pay if their sense of worth is very closely tied to their compensation. Be gentle with these people. Reminders that “at least they still have a job” are not particularly helpful, especially early on.