Ultimate 50-Point Checklist for Effective Layoff Prevention and Preparation

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As I wrote about elsewhere, my last job ended (many years ago) when my employer laid me off.

That was the first job I’d ever lost, as opposed to leaving when it was time.

There wasn’t a recession. Unemployment wasn’t especially high. They simply weren’t successful at marketing my skills.

For a variety of reasons, it was clear to me that I didn’t want another job. Instead, I started my consulting practice, which turned out extraordinarily well. Far better than I expected or had any right to expect. However, that success was not an overnight thing (is anyone’s ever?).

From my last salary to my first consulting payment took months.

Worse, the only plausible option for health insurance was COBRA, which kept the same coverage but without the 80 percent employer subsidy. From $300 a month it leaped to $1500 a month, just when my income went to near-zero.

In the following, I’ll share what I think are the most important things you can do around the risk of losing your job, based on my personal experience, along with input from Danielle Miura, CFP®, founder and owner of Spark Financials.

Proactive Preparation Is Crucial

In this category we’ll cover four elements.

  • Making yourself as layoff-proof as possible
  • Creating a “just in case” checklist of what to do if and when you do lose your job
  • Preparing your finances for potential layoff
  • Non-financial preparation for potential layoff

If you address these arenas now, you’ll reap benefits even if you never lose your job. In fact, you might end up deciding to leave your job because you’ll have created better options.

Then I’ll add a couple of bonus checklists for what to do if and when the risk of job-loss turns into a reality.

Making Yourself as Layoff-Proof as Possible

First off, let’s make something clear from the get-go — nobody is indispensable!

Just think of what would happen if you were to quit, or heaven forbid be run over by the proverbial bus. Would your employer fold and go out of business?


Your loss might be painful, but they’d find a way of continuing to move forward.

Having said that, this doesn’t mean there’s nothing you can do to reduce your risk of losing your job. Here’s a checklist of things you can do proactively to make yourself as layoff-proof as possible (which, as mentioned above, isn’t 100 percent):

  • Look for additional roles and responsibilities you can take on that would make the impact of losing you worse for your employer.
  • Figure out what tasks you could take on that would make your boss’s life easier, and offer to do them. Again, this would make losing you less palatable, so all other things being equal, if someone has to be cut, your boss will prefer that it not be you.
  • Keep your professional skills up to date, and look for opportunities to learn and train in new (relevant) skills. This way, if there’s a need for those skills, your boss will turn to you rather than hiring someone new and potentially letting you go.
  • Sharpen your “soft” interpersonal skills. If you’re seen as hard to work with, you’re likelier to lose your job earlier.
  • Develop your written and verbal communication skills. If you don’t communicate well, your contributions will be less likely to be widely known and appreciated.

Creating “Just-in-Case” Checklist for Potential Layoff

The best time to prepare for something bad that might happen is before it happens. That way you’re not stressed and panicked, which makes you less effective. So, part of being proactive is creating your what-if checklist now rather than procrastinating until it happens.

Here are a few thoughts to get you started:

  • List your most marketable skills and strengths. You can start from all the things your supervisor and/or clients and/or friends and/or colleagues ask you to help with.
  • Next, list all the types of positions (or businesses) that could benefit from someone with those skills and strengths.
  • After that, investigate the availability of those types of positions (or business opportunities).
  • Score the plausibly available opportunities from the above list by how excited you’d be to pursue them, and how well they’re compensated. Figure out how important each of those is for you, and rank them by a weighted score (e.g., if compensation is somewhat more important for you, you might weight that at 60 percent and your excitement level by 40 percent; then, if a particular opportunity’s compensation is say a 4 on a scale of 5, and your excitement is 3 on a scale of 5, it would be scored as 0.60 x 4 + 0.40 x 3 = 3.6). Order the opportunities by their composite score.
  • Identify all your financial resources that could help bridge a loss of income for a few months. The longer your “runway” to get the next job or your first business revenue, the less stressful it would be should you lose your job. The next checklist can help you extend that runway.

This process can help you see that losing your job doesn’t have to be a catastrophe. In fact, it might even have you start thinking about possibly leaving your current position proactively!

Preparing Your Finances for Potential Layoff

If you suspect a job loss is in your near-term future, here’s how you can best prepare yourself financially.

  • Try to maintain or even increase your liquidity. This means avoiding paying more than the minimum required on low-interest debts (e.g., mortgage).
  • If you don’t already have one, consider opening a fixed-rate Home Equity Line Of Credit (HELOC) while you still have a salary. Then, don’t borrow anything from it until and unless you have to. It’s important to try and make this a fixed-rate HELOC, since the majority of HELOCs are variable-rate, which can trap you as market interest rates rise.
  • Consider opening one or more new credit card accounts with zero- or low-interest teaser rates. This isn’t intended to borrow now, but rather to provide you with access to inexpensive credit if and when you lose your job. Once your salary goes away, you’re unlikely to be able to open such accounts.
  • Try to cut your spending proactively now (by trimming spending that doesn’t align with your priorities, replacing as many items as possible with lower-cost alternatives, and/or taking advantage of discounts), and set aside more money into your emergency fund. This will help in two ways. First, it will increase your access to money to help bridge the time between your last salary from your current job and your first from the next job. Second, it will help you get used to spending less, which will extend the time your existing resources could last.
  • Consider if you should temporarily change your allocation of savings from long-term high-risk (read, stocks, real estate, etc.) to short-term low-risk (read, CDs, money markets, etc.).
  • Look for ways to diversify your income, e.g., by starting a side hustle.

Danielle Miura suggests the following ideas (some of which partially overlap some of the above):

  • It’s unlikely that you’ll be able to access your employer benefits after you‘re laid off. Take advantage of all your benefits while you can. If you haven’t been to the doctor lately, set up an appointment now. If there are unused funds in your health and childcare Flexible Spending Accounts (FSAs), spend those down before your last day of employment. If you aren’t contributing enough to your 401(k) to maximize your employer match, consider upping your contributions now (though keep in mind that those funds will be less easily accessible should you need them between jobs).
  • Read your employer handbook to understand your company’s policy regarding disposition of unused vacation and sick time should you be laid off.
  • Review your budget and determine how you can cut back on unnecessary expenditures. Although you will likely receive unemployment after you are laid off, it won’t replace the paycheck you lose.
  • If you’re expecting to be laid off soon, try to pay off your high-interest debts. When your finances are tight, paying a high-interest loan will make it more difficult for you to pay off.
  • Start turning a hobby into a side hustle to make extra income.
  • Check to see if your company offers a severance package for employees who are let go. There’s no obligation for the employer to provide severance pay. However, if they do have such a policy, it could help you bridge the gap until you start your next job.

Non-Financial Preparation for Potential Layoff

Finances are not the only thing you need to consider.

When I was laid off, my employer and I parted way very amicably. In fact, the CTO of the company offered to help me get a new position by recommending me to potential employers.

  • Along this vein, consider asking your supervisor (and possibly points of contact with clients you worked with) for recommendations.
  • As mentioned above in the section on making yourself as layoff-proof as possible, update your existing skills and learn new ones. If you do lose your job, this will make you more attractive to other employers.
  • When networking, concentrate on listening rather than speaking. Be curious as to what your professional colleagues need, what they’re excited about, and what they’re afraid of. Then, try to make positive contributions by sending them relevant articles, connecting them to others in your network who may help them or whom they can help.

Danielle Miura adds several more points:

  • If you haven’t recently done so, update your resume, especially your skills, achievements, and certifications. If you need help developing your resume or finding similar job occupations to apply for, check out onetonline.org.”
  • “Similarly, update your LinkedIn profile with your latest photo, job description, and introduction.
  • Find networking groups and platforms related to your industry, and join the most relevant one(s).
  • Gather proof that you were an asset to your company by making copies of samples of your work, projects that you have completed, and emails that praised you.

That’s it for things you can do proactively. Now, here are a couple of bonus lists, of things to do if and when the risk of losing your job turns into reality.

Bonus 1: Checklist Before Leaving After You’ve Been Laid Off

It happened.

Your supervisor calls you in and shares the unwelcome news. 

Hopefully he gives you at least a few weeks’ worth of salary (with or without having to continue showing up). You might even be lucky enough to get support in finding a new position.

However all that plays out, there are some things that are crucial for you to check off before you leave.

  • Review the list you prepared ahead of time of companies you’d like to work for (assuming you don’t want to do as I did and simply hang out your own shingle). Then look at what positions they’re trying to fill.
  • Reach out to your network to let them know you’re leaving your position, and mention to them the sort of positions you’d be interested in.
  • Continue to network, but looking for ways you can help your network rather than just asking for their help. This is a critical point that I wish I’d known when I was looking for paying contract work.
  • Even if your salary will continue for weeks or months, cut your spending right now just as you’d have to do if your salary stops today.
  • Ask your Human Resources (HR) people whether you can convert your unused paid time off to additional money.
  • Ask your HR people what training or support you may expect from your soon-to-be-former employer. This could be as simple as resume writing training, or as much as training in new skills.

Danielle Miura brings up five additional points:

  • Unless you’re covered under someone else’s health insurance, figure out your options for continues health care coverage. Depending on your income, these options might include COBRA, state health insurance, or marketplace insurance.
  • Ask when your last paycheck will arrive, and how you’ll receive it.
  • Depending on your length of time with the employer and the reason for your termination, you might qualify for unemployment benefits.
  • Ask your HR’s benefits person what options you have regarding any retirement plans, such as 401(k), SIMPLE, 403(b), 457, etc.
  • Once you no longer have ties with your previous employer, it is time to start your job search. Instead of applying to every position within your field, have a game plan of exactly what jobs you want to apply for.

Bonus 2: Once You’re Unemployed, How to Make the Best of Your Time

It’s finally a done deal.

Your last day at work is behind you, and you’re looking at weeks or months without the structure of going to work each weekday morning. How do you fill all that suddenly open time without wasting it and/or becoming insanely bored.

  • First, and most obvious, start looking for a job! You should view this as a part-time jo, and if there are lots of openings, maybe even a full-time one for a while.
  • Look for activities you can engage in that may bring in some income, even if that’s nowhere near your lost salary. When my business revenue dropped by 80 percent for almost a year, I started professional writing through a freelancing site. The income replaced a bare 15 percent of my lost revenue, it kept me productive and sane. And, of course, having 35 percent rather than 20 percent of my prior income level didn’t hurt. Further, my current full-time gig grew out of having polished my technical writing skills.
  • Reach out to professional colleagues and arrange to meet with them periodically for coffee or lunch, to nurture those relationships. When you meet, share what you’re doing, but don’t come across as needy and desperate for their help getting a new job. If you do that, they’re not likely to keep meeting you. It’s too uncomfortable. Instead, let them bring up any way you may be able to help them. That’s what happened to me. My colleague/friend heard I was doing professional writing, and asked if I’d be willing to do that sort of work to support him. It was to be 25 percent of full time, which was already great. But that quickly expanded up to near-full-time.
  • Reach out to family members and friends you may not have had time to meet for a long time, and set up times to get together. Such relationships are crucial to keeping upbeat.
  • Continue reading professional literature to keep up to date on developments in your industry.

Again, Danielle Miura suggests more things to do:

  • Build your skills by getting a certificate and/or taking online classes.
  • Create a website to help display your achievements and interests. Writing and posting articles on your website and/or other sites will show prospective employers who you are and what you bring to the table.
  • Do the things on your to-do list that you’ve been procrastinating on, such as house chores and/or taking a (budget-friendly) vacation.
  • Find a hobby that interests you that isn’t cost-prohibitive.
  • Keep up to date on current events. Not only will this help carry on a conversation, it will also help you be a better-informed and more interesting person.

The Bottom Line

Recessions are notorious as times when companies try to reduce their spending, which usually leads to layoffs. The above 50-point combined checklist can help you proactively prepare yourself emotionally, practically, and financially for a possible job loss. The bonus checklists should help if and when the risk of a layoff turns into an unwelcome reality.

Karen Banes wrote a piece recently on Americans’ plans for improving their finances in 2022. The top five goals mentioned there are:

  1. “Getting out of debt (50%)”
  2. “Removing unnecessary bills (47%)”
  3. “Seeking out deals and discounts (44%)”
  4. “Using a savings app (44%)”
  5. “Applying for a credit card/credit increase (41%)”

As you can see, items 1, 2, 3, and 5 are all mentioned in the above checklists. This just shows how even people who won’t lose their jobs can greatly benefit from taking many of the above-recommended steps. Far more so if you’re at risk of a layoff!


This article is intended for informational purposes only, and should not be considered financial, investment, business, tax, or legal advice. You should consult a relevant professional before making any major decisions.


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