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Redundancies can be fresh new beginnings, too

Kate Southam

by Kate Southam

15 Mar 05:35am

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Filed under: Career, Employment, Jobs, Redundancy

34 comments

If success is the best revenge then landing a higher paying job after being made redundant is pretty sweet.

The ideal situation.

Life gets even better if the new job comes along while you still have most of your redundancy payment intact.

A survey of white-collar workers made redundant last year found 41 per cent ended up finding a new job that paid more than the role they lost.

Right Management commissioned the research that involved 526 people who had completed one of its career transition programs. Held between January and December 2011, the programs lasted anywhere from a month to a year and were all paid for by a soon to be ex-employer.

Of those surveyed, 40 per cent found a more senior role and 21 per cent moved into a job at the same level as the job they held pre-redundancy. Overall, while 41 per cent of the survey group found jobs that paid more than their pre-redundancy job, 21 per cent stayed at the same pay level while 38 per cent took jobs that paid less than their former job.

The Right Management survey didn’t actually spell out the reasons for the salary decline but did find 46 per cent of participants changed industries post redundancy and 53 per cent changed job functions. Either step could involve a salary dip.

The head of Right Management’s Career Management Practice Tim Roche also points out that many of the participants were from the finance sector where salaries are so much higher than many other sectors so a move could well mean a pay drop.

Redundancies will continue in Australia but there is hiring activity too and salary levels appear to be holding steady for now.

Roche says Right Management doubled its outplacement activity between December 2011 and January 2012 and forward bookings reveals a busy time lies ahead at least until June.

Meanwhile, according to the newly released Manpower survey, 24 per cent of Australian employers plan to hire over the April to June quarter while 11 per cent plan to shed jobs.

To make things a little trickier, just because an employer is job shedding doesn’t mean they’re not hiring as well.

Banks are good example. While they are sending many roles off shore they are creating new types of roles in house too.

At a Robert Walters salary briefing two weeks ago, IT specialist Peter Bateson told me banks were hiring digital talent to do creative work they once sent out to agencies.

In one specific instance a bank is hiring game developers on contracts of $1,000 a day to create a game that appeals to young customers. I’ve written more about salary trends on my blog.

Roche agrees that banks are creating new roles to take on tasks such as developing their online transaction capabilities and to replace legacy IT systems with more agile systems.

The hiring activity in other sectors is well known – manufacturing and retail down, mining and resources and now IT up.

Whatever the scene here, the UK is far worse off according to data released in the last two days.

According to Chartered Institute of Personnel and Development research, more than 65 per cent of people made redundant in the UK accepted less salary to land a new job.

The CIPD reckons nearly 2.7 million people have lost jobs in the UK since 2008 and employers have shelled out £28.6 billion in redundancy and other costs. I don’t have equivalent figures for Australia. 

Of those who lost jobs in the UK, two thirds took an average pay cut of 28 per cent to secure a new job.

The CIPD says the climate of fear in the UK has made workers reluctant to ask for money. Experts say British banks in particular are taking advantage of current conditions to bring down salaries that sky rocketed in the good times.

In just the last few days Lloyds and Royal Bank of Scotland alone have announced plans to shed 1,700 jobs between them so any bank wanting to hire new staff doesn’t have to look far to find plenty of people vying for the one job.

So what can you take away from all this?

A redundancy is not the end of the world and could well be the beginning of a new and potentially better career.

Don’t get ripped off when it comes to negotiating a new salary but update yourself on the current market rate for your role so you don’t pass up what has become a reasonable offer.

That doesn’t mean you should take just anything but you might need to be flexible. Contract if you don’t want to take a permanent job at a lesser salary level or use outplacement to move to something new where demand is growing.

There is no wrong or right strategy post redundancy but only what is right for you given your family and financial commitments. 

Most commented

34 comments

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    • Macca says:

      05:38am | 15/03/12

      I was made redundant from a manufacturing company last year. I landed a new job, back in my home city, 8 days after the redundancy.

      I changed industries, got a payrise, and managed to funnel plenty of that redundancy money into the mortgage rather than the temptation of a holiday or new toy.

      I don’t understand why, particularly white collar, people see changing industries as so difficult. So many white collar roles (safety, HR, Commercial / finance / accounts, marketing / sales and IT, for example), particularly in support functions, have relatively generic skill sets.

      Mobility in employment is going be a great asset to have as the skills shortage increases over the next decade

      Reply

    • Mahhrat says:

      06:43am | 15/03/12

      @Macca:  I agree - it’s been hard work sometimes, but I’ve always managed to find work when I’ve wanted it.

      Sure, once it was driving taxis, but it still paid the rent.

      I think the pressures (I know my own stressors matched it) came from the “expectation” that you’d always have work.  I set myself up particularly for job security, and I’m rewarded with that.  Knowing I’ve always got an income is worth more to me that higher pay but less security.  It’s a trade off.

      The other pressure comes from consumerism - we borrow money we can’t afford to buy (in the words of Tyler) “shit we don’t need”.

    • acotrel says:

      06:46am | 15/03/12

      @Macca
      What was your role and quals ?  If you are an engineer your prospects are probably better than for most others.

    • Macca says:

      07:05am | 15/03/12

      Mahrat, a bit of forward planning, tough decision making and hard work goes a long way. I find job satisfaction comes a lot easier when you know there are other opportunities out there; you end up doing your job because you love it, not because you have to.

      Acotrel, I did a B. Arts and have a functional, rather than operational, skillset.

    • acotrel says:

      07:33am | 15/03/12

      Macca
      Personnel Manager or Trainer or Sales manager ?  Any technologist is pretty stuffed these days !  I sincerely believe that our business owners are prepared to lay down and die.  I might be living in the past, but I believe in a technology future for Australia, and I’m going down fighting !

    • RED says:

      10:06am | 15/03/12

      Pretty much every one of those jobs you’ve listed requires a different degree. Sure it probably wouldn’t take too much time to train yourself from one to the other but why would an employer bother when there’s a dozen applicants who are already qualified?

    • SteveKAG says:

      05:57am | 15/03/12

      In the past 12 - 18 mnths the job market in the industrial management sector has been quite depressed.  People have not been moving around so no vacancies have existed.  There have been more people than jobs so employers have been precisely matching every last requirement for their roles. 
      It has started to open up now in the last month and i am seeing a more fluid market with several opportunities being presented.  People could have been taking salary drops because there has just not been the market there.

      Reply

    • Little Joe says:

      06:34am | 15/03/12

      Or the basic reality that skills that have taken a lifetime to build are no longer needed in the area that you live nor the country you reside.

      I fear a great tragedy is about to befall our nation as Government Policies destroys industry and lays waste to regions. When you wake up and find that you are no longer employable, the area that you live in has 15% unemplyment and your house is worth half the price you paid for it. I really do fear for areas like Illawara and Port Kembla.

      Closing down of businesses, offshore outsourcing of employment.

      Good luck Australia!!!

      Reply

    • acotrel says:

      07:40am | 15/03/12

      @Little Joe
      Negativity and defeatism are our enemies.  To just lay down and die is not an option.  I suggest the way forward is to use Germany as a role mode l, and concentrate on the high end of the global market.  We have a plentitude of skilled engineers, scientists, and technicians.  All we need is decent tech-head leadership and a different mindset !

    • Jane2 says:

      10:33am | 15/03/12

      Coal miners in Wales were faced with this in the 1970’s. The majority moved towns and rebuilt lives with new careers. The minority stayed in their dying town and bemoaned “wo is me”, 40 years on they are still unemployed and living in their dead towns bemoaning life. The same has been repeated throughout history as industries die. The thing to remember that for every industry that dies another is born.

      Your choice, you either adapt and grow or you stagnate and become bitter.

    • Shane From Melbourne says:

      11:04am | 15/03/12

      @acrotrel and Jane2- Apart from mining, there is nothing in a globalised system, that China and India can’t do at a cheaper cost. Everything can be outsourced. The simple fact is that the booming sectors of mining and agriculture are not labor intensive while the manufacturing sector in states like NSW and Victoria is getting ripped to shreds by the high Australian dollar. Germany has the European Union which provides ready made markets while keeping competitors out.

    • Tubesteak says:

      02:09pm | 15/03/12

      Shane From Melbourne says:12:04pm | 15/03/12
      “Apart from mining, there is nothing in a globalised system, that China and India can’t do at a cheaper cost”

      Wrong.

      Here’s a few:
      - banking and finance - Australian laws are very specific to Australia and create a unique market. Can’t send that offshore.
      - Taxation - same as banking and finance
      - Property Lawyers - same as B&F
      - Architect - need an Australian licence to do that work
      - Construction - have to be here to build things
      - Stockbroker - need knowledge of Australian market
      - Financial advice - need Australian qualifications and licence

      This list is not exhaustive or definitive. There are plenty of jobs that need to remain in Australia

    • acotrel says:

      06:42am | 15/03/12

      Your comments are OK for people who have a generalist approach to their profession.  Some of us have spent our lives specialising and improving our qualifications in areas where the jobs are disappearing.  In Australia, we don’t make things any more.  If your job usually involves materials and process improvement, chemistry, metallurgy and physics, you can forget about moving on, if you are made redundant.  There is some opportunity t o move to OHS consultancy, but the weeds are pretty thick !
      I had to laugh the other day when the Melbourne Uni guys were giving the kids in our loca l school career advice, and promoted the study of chemistr y at their institution.  Talk about out of touch with reality ! ! I don’t know where you would find the stats on employment of industrial chemists in NE Vic ?

      Reply

    • Jane2 says:

      10:39am | 15/03/12

      Yes but specialist can also change careers. Become a teacher. Become a lecturer. Create a small start up and contract your expertise to business’ that still have a need but dont want to employ someone permanently.

      You then have all the other things that you do and have skills in but havent really thought about. For example, as a chemist out of necessity have you learnt to fix fume cupboards…career opportunity. Do lots of paperwork and file it correctly..career opportunity. Written patent applications…career opportunities. Dealt with government dept…career opportunities.

      It all comes down to how you define yourself. If you pigeon hole yourself then yes there are almost no opportunities but if you look at your actual skills there are many.

    • Al says:

      11:54am | 15/03/12

      There are other roles for chemists other than industrial chemists.
      There are research chemists, chemists in food manufacturing and development, chemists in mining, even chemists in the public service (not to mention education).
      To limit it to industrial chemists is limiting the job oportunities available.

    • chuck says:

      07:11am | 15/03/12

      Last night they were extolling the latest stats which allegedly showed an increase in demand for IT security professionals AND scientists. Seems to me that Acotrel is not to far of the mark as I happen to know several people in these “demand” groups who present well for all intents and purposes and can’t crack a jobbie.
      I would be loathe to tell kids nowadays to get a degree as it seems the somewhat undereducated can, if they are prepared to relocate can crack very well paid blue collar jobs in the mining industry (while they last and before the Chinese manufacturing economy retracts).

      Reply

    • Tubesteak says:

      07:41am | 15/03/12

      When it comes to jobs I prefer to do the monkey thing.

      I like having the choice to make rather than have it made for me. I am usually looking for better opportunities or keeping my eye on the market. I don’t sit still for long unless I have to.

      Reply

    • acotrel says:

      08:41am | 15/03/12

      Tubesteak
      Loyalty to a company counts for nothing these days.  When push comes to shove they will wipe you off like a dirty backside.  It is now the cult of the individual, and we must all now look for positions of advantage.  And if it involves taking your companies’ customers and intellectual property with you, so be it !

    • Aitch B says:

      08:54am | 15/03/12

      @acotrel

      “And if it involves taking your companies’ customers and intellectual property with you, so be it !”

      You do realise that what you suggest is illegal, don’t you?

      http://www.ipaustralia.gov.au/ip-infringement/

      Or perhaps you just don’t care…..

    • Mahhrat says:

      09:33am | 15/03/12

      @Aitch B:  So is cash-in-hand work, but most people do that during their lives too.

    • Greed&Envy; says:

      09:40am | 15/03/12

      I see acotrel spewing his usual shit again. Hate hate hate, envy envy envy. No wonder you are a crusted on.

      I recently got turned down for a voluntary redundancy. Would have meant 200k for me. It was the first time I actually thought about doing something else. Now, I get to sit down doing bugger all all day, and work on setting up some side stream incomes. Something I was always too lazy to have done.

      Counter to the constant woe is me from Acca there, if there is a will, there is a way!

    • Aitch B says:

      10:12am | 15/03/12

      @Mahhrat

      I don’t doubt that but it doesn’t make it right. I’d also say that cash-in-hand work is not a jailable offence whereas IP theft is.

      Add to that the fact that cash-in-hand work hardly has the ability to bring a company down like IP theft can. I’ve seen it happen and it wasn’t pretty - the company that owned the IP went bust and the ex-employee perpetrator spent 4 years with his back against the bluestone walls.

      Do you honestly believe that “most”  people have stolen IP at some stage in their lives? We’re not talking about the illegal download of an mp3 here - that’s a breach of copyright and you cannot compare the two.

    • Al says:

      11:49am | 15/03/12

      Mahhrat - there is nothing illegal about cash in hand work.
      If however they are paying cash in hand to avoid paying other required things (like tax, insurance, super, minimum wages etc.) that is what makes it illegal. I will however assume that is what you meant.

    • Tubesteak says:

      01:59pm | 15/03/12

      acotrel
      I agree. Loyalty is something that goes both ways. I know a company will get rid of me if and when it suits them so I treat them the same way.

      I take it from your IP comment that you didn’t mean “real” IP but some of the expertise and knowledge you have built up in the company that they didn’t know they would miss until it’s gone.

    • Ben C says:

      04:00pm | 15/03/12

      @ acotrel

      Taking your former employer’s customers can be an infringement of intellectual property - your client database is considered to be intellectual property. Unless there is an agreement that you may take some of your former employer’s customers if you set up your own competing business, you are legally not allowed to approach them. The customer may approach you, but you’re probably better off not bothering unless you have clearance from your former employer.

    • Al says:

      08:04am | 15/03/12

      I thnik regarding redundancies what most people need to realise is that, sure you may find a better job you enjoy doing for better pay, however in the meantime you should also look at taking a lower skill/pay/industry job to tide you over.
      For example if you are in an office job and are made redundant, consider taking a job in service (such as restaurants etc) while you are looking for a new job in the area you want to work in, don’t just apply for the jobs you want for your career.
      And don’t waste your redundancy pay, particularly before applying for benefits as you will need the money to carry you through the time you are not elligible for benefits (not that you will need them if you take a lower skilled job in the meantime).

      Reply

    • acotrel says:

      08:50am | 15/03/12

      @Al
      That thinking doesn’t apply everywhere.  In country t owns lower skilled jobs are at a premium, and you need to have the right friends to find one.  Even then there are no unions, and exploitation is rife. It is important to find something you enjoy doing regardless of the pay - life is too short to cop bullshit ! If I lived in a big city and wanted work, I’d be looking at the calls for tender, and hone up on my project management skills.

    • Al says:

      09:43am | 15/03/12

      acotrel - and living in a country town is your choice and you know that lower skilled jobs are at a premium.
      In that case you may need to be willing to relocate rather than wait for something to show up.
      In many country towns jobs are at a premium, no matter what skill level.
      “It is important to find something you enjoy doing regardless of the pay - life is too short to cop bullshit !”
      And it is important not to get caught in the welfare trap, better to do a job you hate untill something comes along than be dependant on welfare.
      I know I have done exactly this in the past to avoid relying on welfare, and am now in a job I actualy don’t mind. (like would be taking it a bit too far, but I can’t think of any job I would like to do. I would rather just work for myself, which is not a job, it’s a buisness).

    • redvixen says:

      08:27am | 15/03/12

      In 1998 my husband and I were both made redundant within 4 weeks of each other.  While this was a very stressful time it forced us to think about what we wanted from our working lives.  We both got better (meaning happier) jobs with better pay and conditions.

      Unfortunately, the company I now work for has been bought out.  So I might be looking at a redundancy again in about 12 months.  Such a shame, as I loved my job (pre-takeover).

      Reply

    • Labrat says:

      10:13am | 15/03/12

      Hi All,
        Long time reader, first time writer. Im certainly no acotrel, mahhrat, tubesteak or of course erick however please stick with me.
        2 weeks before christmas last year I was handed my redundancy after 11 years of work. Sure the boss and I had problems, she was a menopausal dictator with anger issues but we got along.
        I meet right management within 2 seconds of being made redundant and I can guarantee that no meeting since or ‘wanna be psych talk hand holding’ was every going to get me a job. I believe they are a PR exercise by the ex company to make themselves feel better emotionally and more importantly legally.
        Anyway sparking me into motivation overdrive I have since found a new job, sane boss and even catch the bus to work for the first time 17 years. That took some major re-adjusting but that story is for another time.
        So my point - stay away from the wanna be pychs, get an interesting job and put that money straight into the morgage and give the bird to the ex-employer taking all your knowledge, skills, clients and everything else you can with you. Remeber at the end of the day your just a number.

      Reply

    • Greed&Envy; says:

      10:57am | 15/03/12

      Tony? I know someone who goes by Labrat….. Kedron…

    • Tanya says:

      11:11am | 15/03/12

      I have never been made redundant but I have worked in a number of organisations where they have occurred en masse and have dealt with the emotional fallout experienced by former colleagues and friends. To a small extent on one or two occasions, I have also been involved in the planning of them by default of being in senior positions. I have witnessed absolute stupidity for example, the issuing of substantial packages to employees who have almost immediately been brought back on contract for much higher wages when the knowledge or skills gap has become apparent or the dissolution of entire teams or departments followed by the realisation the original structure existed for a reason. The lesson for me has been to work with the understanding that nobody is immune from it and that appropriate and proper rationalisation sometimes doesn’t apply, particularly when large numbers of staff are dispensed with. I have probably also learned to recognise the signs of it – reduced assignment of work to individuals and teams;  poorly disguised attempts to extract knowledge and skills transfer from target employees; process re-engineering and task absorption; irregular meeting patterns and strange visitors, to name a few. Generally people know it is coming. But I also think that regardless of how obvious the signs are, people still experience shock, anxiety and self doubt and the longer the period of employment, the more drastic the impact. Your article is right – redundancy can be a new beginning and I would hope that if it happens to me I will be stoic enough to see it that way and focus on the mobility and marketability of my skills. But the personal toll it has the potential take should never be forgotten by key decision makers. The job market is extremely daunting for those who haven’t been in it for a decade or more.

      Reply

    • Sarah says:

      02:42pm | 15/03/12

      I took a voluntary redundancy, cleaned up in the cash stakes and it provided a platform from which my career absolutely exploded and rocketed onwards and upwards.

      Redundancy was the best thing in the world for me, but most people find the process confronting, shocking, traumatising and dehumanising. Its easier said than done sometimes to just brush yourself off and pick yourself back up again after a redundancy.

      Reply

    • Geoff says:

      01:43pm | 16/03/12

      Been redundant for 18 months, managed to get a few hours work for Coles on the dock…  now a new manager has given most of my hours to a mate.  centrelink refused to pay me anything for over 12 months… had to sell my apartment, had to sell my car…  apply for 30 jobs a month, had 3 interviews in 18 months, worked 30 years in IT, trainee to middle management… spent 3 months training Indians to do my job before the chop.  Applied for anything from train driver to childcare to helpdesk to nightfill etc, etc…  I’m thinking if you are 50+ you might as well go hang.

      Reply
 
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