Getting retrenched is one of the most difficult challenges that life can throw your way. It may very well be one of the most stressful times of your life and while you might not know when it could potentially happen to you, it’s a good idea to try as best as you can to prepare and protect yourself for the potential eventuality.
Switch2Credit Life CEO Sasha Knott says the first step is knowing your rights. Understand that a company can’t simply retrench you without following processes outlined in labour laws, which state that retrenchments must be a last resort when all other avenues have been explored and deemed non-viable. You are also entitled to severance pay.
While it might seem counter-productive, since you’ll be losing your income, it’s advisable to consult with a financial adviser over the options available to you at this time.
“You might need to cut back wherever possible, even suspending payments into savings or pension funds in the interim,” says Knott.
If you don’t already have, it’s also not a bad idea to take out retrenchment cover.
Next on your list is to claim for unemployment benefits. “Regardless of a retrenchment payout, your company would have been contributing directly to the Unemployment Insurance Fund (UIF) as part of your monthly salary. With this, you are entitled to claim a portion of your salary while you are searching for new employment,” Knott advises, adding that this benefit needs to applied for within six months of your employment contract being terminated.
Next is to go through the credit agreements for all outstanding debt. Most credit agreements these days have credit life insurance built into your monthly instalment so what you might not realise is that you’re entitled to claim from this insurance if you’re retrenched.
“You could potentially claim on credit life insurance if you have any debt, including credit cards, home loans, retail store cards, cellphone contracts or vehicle finance,” she advises.
Once you’ve made sure that you’ve covered your debt and have a clear understanding of how much money you will have coming in for now, you’ll need to draw up a new interim budget to ensure that you live within your means, because the last thing you want to be doing at this point is getting further into debt.
As soon as you’ve handled your finances you’ll need to get working on finding a new job. Update or spruce up your CV, hit those recruitment agencies and free job portals and get sending.
“Don’t be disheartened if your inbox isn’t flooded with interest from employers. Hiring processes often take time and you might not hear back straight away. If you do get an interview, but don’t get the job, remember that every interview is good practice for the one that you do get,” Knott says.
Last, but not least, consider other ways of earning an income while you look for a job. If you have a spare room in house or a cottage on your property, rent it out. If there are any hobbies that you are able to turn into a temporary side hustle, leverage your skills.